"Anything that happens from now on is his responsibility"
Brigadier General Mal Rerden,
commander of international security force
"I know that at the moment they are about 800 metres from me," he told Radio Australia.
He said a number of East Timor police had deserted their post to join his rebel group.
The rebels are armed with automatic weapons that were reportedly stolen from police border posts over the weekend.
Reinado has denied stealing the weapons saying the police gave them to him and his men.
"I didn't take anybody's weapon. I asked them to give and I have here some of the police personnel voluntarily come with me," he said, adding that more were on the way to join him.
|Australia has about 800 troops deployed |
to provide security in East Timor [EPA]
Domingos da Silva, the village leader of Same, confirmed that some policemen had joined with Reinado.
He said hundreds of villagers had fled to the mountains for refuge, leaving the town almost deserted.
Xanana Gusmao, East Timor's president, ordered security forces on Monday to move in and capture Reinado after 25 automatic weapons were reportedly stolen from police posts over the weekend.
The move comes amid deteriorating security in the lead up to the country's presidential elections on April 9.
Reinado deserted East Timor's armed forces last May along with nearly 600 soldiers, triggering violence between rival factions of the security forces.
He was jailed for leading the mutiny but escaped from prison in September along with 50 other inmates.
On Thursday Alexander Downer, Australia's foreign minister, urged Reinado to surrender.
"It's of concern to us that he is still on the loose and I think he, appropriately, should surrender himself to the East Timorese authorities," Downer told reporters.
Military officials have said any operation to capture Reinado would involve "appropriate use of force".
Brigadier General Mal Rerden, the Australian in charge of the East Timor's international security force, told reporters in Dili that Reinado would bear responsibility for what could ensue.
"He has one option. He can help the people of Timor-Leste by surrendering himself and removing the threat of the weapons," he said, referring to the country by its formal name.
"If he cares about the people of Timor-Leste, if he cares about the people with him now, he would give up his weapons and surrender. Anything that happens from now on is his responsibility."