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East Timor works towards forming new governme -

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(generated from captions) East Timor's political status is precariously balanced tonight as President Xanana Gusmao continues to hold talks to try to guide his country through a dangerous passage to the establishment of a new government in the wake of the recent violence and yesterday's forced resignation of Prime Minister Mari Alkatiri. President Gusmao is waiting for the Fretilin Party, which holds the majority in the parliament, to nominate a replacement for the prime minister. Under the fledgling nation's as yet untested constitution, the President has to approve the Prime Minister's nomination.

What's not clear is what happens if a deadlock develops between Fretilin and the President. The man who may emerge as a compromise candidate is Foreign and Defence Minister Jose Ramos Horta, whose own resignation on Monday was the final nail in Mari Alkatiri's political coffin, has been with President Gusmao for the past two hours and has just left that meeting to make himself available for interview. He joins me now.

Jose Ramos Horta, you've come from

the President's office. Has there

been any significant development

today that advances the search for

today that advances the search for a new Prime Minister? Kerry, if you

allow me before I answer that

question, I wish to offer my

sympathy and tremendous admiration

for the Australian soccer player

for the Australian soccer players.

Last night is the first time I

watched the game, the World Cup,

watched the game, the World Cup, and they were very, very impressive

they were very, very impressive with the professionally the excellence

the professionally the excellence of the game. So they didn't lose, they

actually won the admiration, the

hearts of millions around the world.

In regard to your question, I

believe that in the next two or

three days we should be able to

reach a political resolution in

terms of a transition government

that will continue the work of the

previous government until elections

next year. My president the

continuing talks with all concerned.

The political party is in a

position. Members of government,

civil society. Today he met in the

morning with the cop council of

State to work out a consensus in

State to work out a consensus in the country for the next few months.

What I can say is while Fretilin is

a respected majority party and the

President wins to respect this

President wins to respect this clear political majority, nevertheless,

there is a serious legal problem

surrounding the election of the

Fretilin leadership in the Congress

in May. That congress violated the

principle of secret ballot that is

enshrined in legal laws. For this

reason the leadership of Fretilin

reason the leadership of Fretilin is viewed as illegitimate. However, on

the other hand, we have to balance

that against the reality ta the

largest part in this country is

Fretilin. So, the President is

trying to navigate through these

political complexity and find

consensus to form a government in

the next few days and I'm confident

we shall be able to get a

resolution. Are you foreshadowing

THE possibility what the President

may try to opt for a Prime Minister,

not the primary candidate put up by

Fretilin? That's always a

possibility. In any case, Fretilin

being a party of tremendous

responsibility, they understand

responsibility, they understand that the responsibility, they are guilt

to co-operate with the President

to co-operate with the President and the rest of society to ensure that

we overcome this political crisis.

I'm sure that they would go along,

if necessary, with candidate for

Prime Minister who might not be

necessarily coming from Fretilin.

Are you now prepared or have you

indicated to President Gusmao that

you are prepared to make yourself

available for the Prime Minister's

job if that becomes, in his view,

the right compromised outcome?

I certainly re

I certainly remain available to

serve my country, to serve the

extraordinary people of my country,

to assist my president who is doing

an exceptional job and showing

tremendous leadership. So, I would

do my utmost to assist him in his

very complex task, but I would

emphasise again that I would prefer

that somehow we find a good

candidate from within THE Fretilin

party. Now, can you see in your

terms a clear person that would

terms a clear person that would come under your description of a good candidate?

Yes, I'm impressed with a young

Cabinet member. He's very eloquent.

He's very good English speaker.

He's very good English speaker. He's the minister of social affairs. He

has done a tremendous job in the

last few weeks during the crisis.

Although he's a member of Fretilin,

he's also view is not partisan. He

gets along with everybody. An

alternative obviously is our

ambassador to the United Nations

ambassador to the United Nations who challenged the Prime Minister in

pave. He's also very popular within

the party and within the country.

Is it fair to say that the

Is it fair to say that the situation right now is somewhat confused? I

mean, does East Timor have even a

caretaker Government at the moment?

I know you resigned and that automatically when the Prime

Minister resigned, technically

that's the end of the Government. I

mean, who is actually running East

Timor now? Is the power all in the

hands of the President? Well, much

power rests in the hands of the

President since the unanimous

resolution of the Parliament of May

30th. So, the President is backed

by a unanimous resolution of the 30th. So, the President is backed up

Parliament. However, under the

contusion once a Prime Minister

resigns and the Prime Minister

accepts his resignation, the whole

government automatically resigns.

However, they must stay in office

and we stay in office until a new

government is formed. So there's no

power vacuum here. We all continue

on our desks to exercise our

responsibilities. Now, we had

reports today that something like 1,

were move 1,000 supporters of Mari Alkateri reports today that something like

were moving towards Dili to

their protest. Are you confident were moving towards Dili to register

that this very tricky process over

the next two or three days can be

conducted without tensions breaking

out into something worse? Well, we

had demonstrations here for several

days. The demonstrations have been

extremely peaceful. Not one single

incident that has been recorded.

Yes, there have been attempts by

some elements to bring Fretilin

supporters into the city, but the

outgoing Prime Minister, Mr

and others, have shown a tremendous outgoing Prime Minister, Mr Alkateri

sense of responsibility. They have

again out of town and met up with

some of their supporters and I

understand now their supporters are

not coming to Dili. They are return

returning eastwards away from the not coming to Dili. They are

capital. Is it your understanding

that we're toad that Mr Alkateri

will be in court on Friday to

testify and as it was reported here,

to testify about his role. Not just

about the role of Roguero Labato

with the supply of guns to rebels,

but that the Prime Minister himself

may have to testify about his own

role. Is that your understanding.

I understand only that he has

received notice from the prosecutor

general's office to answer

questions, but I'm not sure - I

don't me whether as a witness in Mr

Labato's case or as an accused in

the weapons distribution to

civilians. There clearly is a lot

unresolved anger between civilians. There clearly is a lot of

and groups in East Timor. Very unresolved anger between individuals

substantial anger. How big a hurdle

are those differences now going to

be for a new government to find a

genuine reconciliation within your

country? Well, throughout our

history, the past 24 years and the

occupation in '99, we had obviously

much, much greater suffering,

killings, deaths than happened in

May and yet the people of this

country have shown extraordinary

bravery in forgiving, in reconcile

reconciling. I would say most bravery in forgiving, in

observers who have been here would

agree that after the handover in '9

9, 2002, there's not been any

revenge killing against anyone who

co-operated in the past with the

other side. So this only

illustrates, you know, how our

people are capable of forgiving. So

I'm very optimistic that once we

resolve the political deadlock, a

new transition government is

established, working with much

respect of church leadership and

civil society in germ, we will be

be able to nirkiate healing the civil society in germ germ, we will

wounds and the people in this

country are extraordinary in terms

of forgiving. So I'm not

pessimistic, I'm not worried, that

we are able to heal the wounds of

the recent past. Jose Ramos Horta,