President Xanana Gusmao made the announcement on Tuesday during talks with the 12-member Council of State, said Mario Carrascalao, who sits on the advisory body.

Carrascalao said Gusmao planned to extend the emergency powers granted to security forces for one more month.

The army and police will retain their power to prevent large gatherings, question and search suspicious persons and confiscate weapons for one more month.

Under pressure

The news came after a show of strength by Alkatari, who addressed thousands of his supporters at a rally 10km outside Dili.

"We must enter Dili - but not today," Alkatiri said from the back of a truck to shouting supporters.

Thousands gathered to hear
Altakiri speak

Altakiri resigned yesterday after allegations that he allowed the arming of militia's to attack his political opponents.

The former prime minister had been under pressure for two months after a dispute with sacked soldiers that led to widespread violence and left 20 people dead.

"We are people who don't want violence and want to win again in 2007," he said, referring to elections planned for next year.

An estimated 3,000 people gathered to hear him speak, chanting "Stay on, stay on" and "We want to enter Dili."

A long line of his supporters' trucks filled the roads as armoured vehicles of Australian-led multinational forces waited several hundred metres away and military helicopters circled.

Extra security checkpoints were prepared by the authorities because of fears of clashes between Alkatiri's supporters and those who had called for weeks for him to step down.