East Timor goes to polls, few signs of trouble

DILI, June 30 (Reuters) East Timorese voted today in a parliamentary election that could put the impoverished, young country on a new path after communal violence last year.

The election campaign was mostly peaceful and security in the capital low-key, with small groups of UN police wearing blue berets at polling stations.

Streams of people in the former Portuguese colony queued from early morning under fierce sunshine to cast their ballots in the third election in three months, following a presidential vote and run-off.

Fourteen parties are contesting the poll, widely regarded as a showdown between the ruling Fretilin party and CNRT, a party launched by Xanana Gusmao.

After serving as the country's first president, Gusmao -- a charismatic hero of the resistance during the decades of Indonesian occupation that followed Portugal's withdrawal in 1975 -- now wants the more hands-on post of prime minister.

''I don't care which party is elected, but I hope one of the 14 will soon form a good government and national parliament so that our interests are defended by creating jobs and setting laws for our nation that soon end the crisis,'' Joao Pinto, 35, said at a polling station in the capital soon after casting his ballot.

The Fretilin government sacked 600 rebellious soldiers to trigger violence last May that killed 37 people and drove 150,000 from their homes. Foreign troops had to be brought in to restore order.

UN envoy Atul Khare told Reuters election security had been good, although he noted an incident in Ermera district where someone was arrested at a polling station for carrying arrows.

In Baucau in the east of the country five houses were torched on Friday night, police commander Mario Belo said by telephone, but he said it was not election-related.

Mari Alkatiri, secretary general of Fretilin, said after voting in the capital that he was confident his party would win and urged all East Timorese to accept the result.

''Fretilin will form an inclusive government and will see to peoples' necessities and restore security,'' said Alkatiri, who stepped down as prime minister after last year's turmoil.

FOREIGN OBSERVERS CNRT spokesman Dionisio Babo also expressed confidence, but said he had heard ''very worrying'' reports marked ballot papers had been found in Bobonara and Liquicia districts.

The recent presidential polls also saw claims of fraud and intimidation, although observers said the voting was mostly fair.

Nearly 500 foreign observers are monitoring Saturday's polls.

Julio Tomas Pinto of the University of Timor Leste said he did not expect either Fretilin or CNRT to win a clear majority in the 65-seat parliament.

''I predict both will get about 20 seats in parliament but to form the government in parliament they each need 35 or 34 seats... so they will have to form a coalition with other parties,'' he told Reuters Television.

Preliminary election results may not emerge before early next week, officials say.

Bad weather had caused concerns about the logistics of the election in more remote parts of the country but UN officials said they were confident the voting would go smoothly.

President Jose Ramos-Horta told Reuters in an interview on Friday that East Timor's leaders needed to unite to fight poverty and improve security.

East Timor voted overwhelmingly for independence in a 1999 ballot surrounded by bloodshed blamed mostly on pro-Indonesian militia and Indonesian military elements, and became a full-fledged nation in 2002 after a period of UN administration.

The tiny, predominantly Catholic country is one of the world's poorest but is starting to tap rich energy resources that over time could significantly raise standards of living.

Ramos-Horta said the country should use interest earned from a 1.2 dollar billion oil fund, together with international aid and, possibly, bilateral borrowing to create jobs and slash poverty.

REUTERS PJ RN1136