The streets of Dili were quiet and nearly deserted on Friday afternoon, a day after violent clashes between rival East Timorese factions, with no local police or military presence seen.
Foreign Minister Jose Ramos-Horta told New Zealand Radio the warring parties in the tiny nation might be brought together for talks over the weekend, and that in the meantime government forces and the fighting factions had agreed to leave the city.
"By Sunday, I hope for a roundtable chaired by the President, Xanana Gusmao," he said.
One hospital official said 10 people were killed and around 30 wounded on Thursday in clashes sparked by a government decision to sack almost half the country's military after they protested against poor conditions.
Most of those killed were shot when rebel army elements opened fire on unarmed police being escorted out of Dili police headquarters after a negotiated cease-fire, officials said.
At least six people had already been killed in Dili, the capital, before Thursday as protests by many of the almost 600 dismissed soldiers spiralled into violent clashes.
Officials said the fighting appeared to have quieted down after commandos from Australia, one of several countries asked to help, landed on Thursday.
The Australian military presence at the airport was strong on Friday and more troops were arriving. Those already there appeared relaxed, smoking and lounging in the shade of trees.
Two Australian armoured personal carriers were seen on Dili's streets near deserted government buildings and the UN compound, at one point disgorged a dozen soldiers who patrolled on foot, sweating profusely in the tropical humidity. They wore light body armour but their protective helmets hung from their webbing at their sides.
Shops were closed but some residents emerged to stare at the troops in curiosity and in some cases use cellphone cameras to take pictures of them. A few shouted "Australia, the saviour!".
Although some residents said there were no indications of any fresh gunbattles, others said they heard sporadic gunshots early in the day, including one or two near the presidential residence.
Dionisio Babo Soares, Timorese co-chairman of the Timor-Indonesia truth and friendship commission, told reporters in Bali that while the situation was under control "tents on the outskirts".
PRESIDENT IN CHARGE: President Gusmao made a radio announcement on Friday saying he is now in total charge of security conditions including local military and police as well as international forces. East Timor, which shares a land border with Indonesia's West Timor, became the world's newest nation in 2002 after a bloody 1999 vote to break free from nearly 25 years of Indonesian rule.
Asked by reporters on Friday whether Indonesia felt uneasy with the large presence of Australian troops in East Timor, Foreign Minister Hassan Wirajuda said: "Absolutely not."
"We see this entirely as an issue for Timor Leste."
Tiny East Timor, barely bigger than the Bahamas and one of the world's poorest nations despite potentially lucrative oil and gas reserves, requested international help on Wednesday.
Jean-Marie Guehenno, the UN's undersecretary-general for peacekeeping, said in a briefing to the UN Security Council in New York that East Timor's national police force was reported to be in total disarray.