Court of Appeals 13 Nov ruled unconstitutional AMP govt’s proposed transfer of oil funds to Economic Stabilisation Fund. Govt rejected finding, further stoking political tensions with Fretilin partner, which has threatened to leave govt in move that require early elections.

Australian defence minister announced 100 of 750 Australian members of the international stabilisation force would return home early next year.

PM Gusmão clarified earlier comments on withdrawal of International Stabilisation Force, saying troops needed for “at least 1 more year”. Timorese Court of Appeal refused petition presented by parliamentarians, human rights groups against president’s amnesty law, pardoning 94 implicated in 2006 crisis.

Leaked UN report of investigation into Feb attacks on president highlighted weakness of Timorese forces’ response, slowness of UN. Leaked autopsy findings on rebel Alfredo Reinado killed in same incident showed shot 4 times at close range. Separate UN report noted increase in complaints about abuses by security forces. IDP camp at Dili airport, one of country’s largest, closed without incident.

President Ramos-Horta and PM Gusmão indicated satisfaction at Indonesia President Yudhoyono’s regret for human rights violations surrounding Timor’s 1999 referendum (see Indonesia). Ramos-Horta said would not seek further judicial proceedings. Ramos-Horta proposing new amnesty legislation for perpetrators of 2006 violence. Police in Dili 7 July used tear gas to disperse student protest.

UNPOL reportedly considering handover of command to national police in phased approach from July.

Marking sixth anniversary of independence 20 May, President Ramos-Horta announced some 90 pardons, remitted sentences: including former Interior Minister Rogerio Lobato, imprisoned for arming civilians in 2006 violence. 4 Reinado supporters linked to 11 Feb attacks on Ramos-Horta, PM Xanana Gusmão extradited from Indonesia 5 May. 3 May agreement between governing coalition member Timorese Social Democratic Association and opposition FRETILIN puts coalition’s parliamentary majority at risk; increased chance of elections early 2009. Ramos-Horta early month requested UN presence until 2012: current UN mandate expires Feb 2009.

Security threat removed; 29 Apr surrender of Gastão Salsinha and 11 other fugitive rebels linked to 11 Feb attacks on President Ramos-Horta may bring increased stability. But ramifications of presidential efforts at reconciliation in month unclear: upon 17 Apr return to Dili to resume presidential duties, Ramos-Horta announced pardon of 80 criminals, including convicted former interior minister Rogério Lobato, to take effect 20 May. After surrender, Ramos-Horta said “forgave” Salsinha but that he must face courts with 5 others. State of emergency lifted 22 Apr except in Ermera, where joint police-military command now tasked with search for illegal weapons. 4 Timorese rebels also detained in Indonesia in month for suspected involvement in attacks; 3 to be deported to Dili early May. 28 Apr Australia announced withdrawal of 200 extra troops sent after Feb attacks.

Rebel Amaro da Costa, alias Susar, surrendered to police custody 2 March; 6 other rebels implicated in 11 Feb attacks on President Ramos-Horta and PM Gusmão surrendered 22-23 March. Government talks with lead rebel Gastão Salsinha aimed at his surrender continued. State of emergency extended for 30 days from 23 March. Ombudsman report listed 8 incidents of police and military abuse since imposition of emergency. Ramos-Horta discharged from hospital 19 March. PM Araújo announced 31 March that assistance to Salsinha a criminal offence.

President Ramos-Horta shot in attack on home 11 Feb by rebels led by former head of military police Alfredo Reinado, himself killed in firefight with guards. PM Gusmão escaped uninjured from attack same morning reportedly led by Reinado associate and leader of 2006 “petitioners” (disgruntled former soldiers) group, Gastão Salsinha. Reinado’s death may clear obstacle to reconciliation with petitioners, hundreds of whom have come to Dili to negotiate with government, and are housed in government- supported IDP camp. Gusmão declared 48-hour state of emergency, extended for 30 days 22 Feb. Ramos-Horta recovering in Darwin, Australia; Parliament President Araujo appointed acting president 14 Feb. Hunt for Salsinha and others closely associated with Reinado, now hiding in hills, continues. 4 suspects arrested after launch of security operations against rebels. Australia provided extra 200 soldiers and 70 police to help shore up security; few public disturbances reported.UNMIT mandate extended 1 year 25 Feb.