Subject: AP: On Day One of independence, East Timor begins building a nation

Also: East Timor Paid for Its Freedom with Blood - Clinton

On Day One of independence, East Timor begins building a nation Mon May 20, 1:31 AM ET

By JOANNA JOLLY, Associated Press Writer

DILI, East Timor - A new Cabinet was sworn in Monday. Former U.S. President Bill Clinton raised the flag at the new U.S. Embassy. The government signed a treaty with Australia to share revenues from oil reserves.

On the first day of East Timor (news - web sites )'s independence, the work of nation building began in earnest. The tiny half-island territory of 800,000 people proudly took its place among the community of nations early Monday, declaring itself a sovereign country and putting an end to centuries of often brutal occupation.

As East Timor awoke after a night-long independence party, hundreds of people crowded in front of the former Portuguese colonial palace in the capital Dili to watch Prime Minister Mari Alkatiri swear in 23 Cabinet ministers and state secretaries.

"We have to create a solid, transparent and good government," said Alkatiri after the ceremony, adding that the new government would focus on reconciliation with East Timor's former occupier, Indonesia.

As dignitaries looked on, several hundred soldiers from East Timor's newly created defense force joined former veterans of the resistance in a parade to commemorate their 24-year bloody independence struggle.

"For years we fought against Indonesian soldiers in the jungle, now we parade to show solidarity with our countrymen," said Ajeldito Guterres as he marched in front of the palace, now the seat of government.

Monday's events followed a jubilant independence celebration at an outdoor arena featuring a dazzling fireworks display, traditional dances and speeches by U.N. Secretary General Kofi Annan (news - web sites) and newly inaugurated East Timorese President Xanana Gusmao.

Just after midnight, the United Nations (news - web sites ) lowered its flag — ending a 2 year interim administration by the world body — and East Timor raised its flag, a white star on a background of red, black and yellow.

Tens of thousands of people cheered, applauded and cried as they watched their homeland become the world's newest nation. Images of the long and bloody struggle for independence — including torture scenes and photographs of resistance heroes — filled wide screens.

A 15-meter-long (50-foot-long) float, in the shape of a crocodile with a little boy sitting atop it, was wheeled into the arena. Legend has it that Timor island was once a giant crocodile befriended by a local boy, who then rode the oceans on its back.

In East Timor's new parliament building Monday, speaker Francisco Guterres inaugurated the 88-member assembly in front of Annan.

In their first act, the legislature voted to sign the U.N. Universal Declaration of Human Rights and become the newest member of the 189-strong world body later this year.

On the other side of town overlooking Dili's seafront, former U.S. President Bill Clinton raised the stars and stripes at the new U.S. Embassy.

Clinton, who arrived in Dili on Sunday for a two-day visit, was one of the many foreign dignitaries who attended independence celebrations.

"I don't think we can defend everything we did," he said in response to a question about U.S. support for the Indonesian military regime that invaded East Timor in 1975.

"I don't believe America or any of the other countries were sufficiently sensitive in the beginning or for a long time," said Clinton.

Indonesia's occupation killed tens of thousands of people through forced migration, starvation and murder. In 1999, the Indonesian military and its anti-independence proxies laid waste to much of East Timor following a U.N.-sponsored referendum in which voters overwhelmingly decided in favor of independence.

Relations with Indonesia are expected to be the fledgling nation's top foreign policy priority because of that country's proximity and East Timor's desire to prevent disgruntled Indonesian officers from inciting militiamen still living in Indonesian West Timor.

President Gusmao missed much of the independence ceremony, choosing instead to accompany Indonesian President Megawati Sukarnoputri on a visit to a cemetery containing the graves of Indonesian soldiers killed in East Timor.

Megawati has long been an opponent of East Timorese independence, but she decided to attend the independence celebration anyway — a decision that angered hardline lawmakers at home.

Also Monday, Prime Minister Alkatiri signed a treaty with Australian Foreign Minister Alexander Downer to share revenue from oil reserves in the Timor Sea.

The treaty will give East Timor a 90/10 split of revenue, expected to be worth seven billion dollars over the next 20 years. The money, which is not expected to kick in until 2005, will give an enormous boost to independent East Timor, currently ranked as one of the world's poorest nations.

For now, East Timor must rely on foreign aid to make ends meet.

East Timor Paid for Its Freedom with Blood - Clinton By REUTERS

DILI, East Timor (Reuters, May 19) - Former President Clinton lauded the ``historic struggle'' of East Timor's people Sunday, saying they paid for their freedom in blood.

Representing the United States at events marking East Timor's formal independence at midnight, Clinton said much sacrifice had also gone into the making of the first nation of the 21st century.

The United Nations has run East Timor since it voted to split from Indonesian rule in 1999, a decision that triggered a vicious assault from pro-Jakarta militias who destroyed much of the territory. It has been under U.N. control since.

``East Timor has had a long, difficult and historic struggle and it is a tribute to the persistence and resilience of the people of East Timor and their leaders,'' Clinton told a news conference on arrival in the capital Dili.

``I want to thank the leaders and the people of East Timor, they have given all of us the chance to remember that freedom is precious and your freedom has been paid for by blood and sacrifice.''

Clinton was accompanied by Richard Holbrooke, former U.S. ambassador to the United Nations, along with Assistant Secretary of State for East Asia and Pacific Affairs James Kelly.

Monday, Kelly will inaugurate the U.S. Embassy in Dili, around the same time both sides exchange diplomatic notes to establish formal relations.

Other VIPs to have touched down in Dili include U.N. Secretary-General Kofi Annan, who will hand over power to the new government, Australian Prime Minister John Howard, and heads of state from Portugal, New Zealand and a dozen smaller countries.

Indonesian President Megawati Sukarnoputri is due to make a fleeting visit later in the evening.

Like all senior dignitaries arriving in East Timor, Clinton wore a traditional Timorese weaving on his shoulder.

Clinton was president when the militias went on their killing and destructive spree. Washington soon after cut military ties with Indonesia in response to the violence, and has yet to restore them because Jakarta has still not accounted for the bloodshed.

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