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Tuesday August 4, 11:23 pm Eastern Time Portuguese minister upbeat about East Timor talks

By Anthony Goodman

UNITED NATIONS, Aug 4 (Reuters) - Portuguese Foreign Minister Jaime Gama gave an upbeat assessment on Tuesday after a first day of U.N.-sponsored talks with his Indonesian counterpart, Ali Alatas, on the long-standing problem of East Timor.

``We have made some progress and we hope to conclude tomorrow,'' Gama told reporters.

He said he was barred from going into details because Secretary-General Kofi Annan ``asked us for a certain basic behavior.''

But his demeanor and that of accompanying Portuguese diplomats gave the impression that a substantive announcement could be in the offing after the talks ended on Wednesday.

The international community has never recognized Indonesia's December 1975 invasion of East Timor, an abandoned Portuguese colony, nor its annexation the following year as Indonesia's 27th province.

U.N.- sponsored talks aimed at finding an acceptable solution have dragged on sporadically since 1983.

A new opportunity appeared to open up when economic and political turmoil in Indonesia in May ended three decades of rule by President Suharto and he was replaced by President B.J. Habibie.

But while Habibie has spoken of giving East Timor a ``special status'' of autonomy, Indonesia has ruled out any referendum or popular vote, as called for by Portugal and those seeking independence for the territory's 800,000 predominantly Roman Catholic inhabitants.

Gama said proposals and suggestions had been made by Secretary-General Kofi Annan and by the U.N. chief's personal representative for East Timor, Pakistani diplomat Jamsheed Marker.

While declining to disclose details, Gama said: ``We are ... going into more effective negotiations than during previous meetings. Also the input of the United Nations has been strong and that also created an atmosphere for handling specific points.''

He declined to say whether the U.N. proposals dealt with the issue of autonomy or included some sort of interim arrangement for the disputed territory.

U.N. sources also suggested before the talks got under way that confidence-building measures might be one topic of discussion.

Gama would characterize the U.N. proposals only as ``global on the one hand, detailed on the other,'' and said the talks were ``going in a more effective manner than previously.''

Gama and Alatas were Annan's dinner guests on Monday night. On Tuesday, the secretary-general first conferred separately with the two ministers and then chaired a joint session, with talks resuming in the afternoon.

Indonesia last week began withdrawing the first of about 1,000 combat troops that it said would be pulled out of the territory, but many thousands more are believed to remain.

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