Jeremy Wagstaff, Jakarta – Indonesia raised for the first time Wednesday the possibility of independence for the troubled half-island of East Timor. But the offer was greeted with suspicion by East Timorese leaders.

Ministers said Jakarta will continue to offer East Timor special autonomy, but if that is rejected, the government will propose that a special assembly of Parliament due to meet in November debate granting independence to the former Portuguese colony. The assembly, or MPR, is a partially elected body whose primary role is to elect a new president. "If they want to have their freedom, they are welcome," the Associated Press quoted Foreign Minister Ali Alatas as saying.

Officials said the dual option was a face-saving way of moving quickly toward granting independence. Special autonomy, under which the territory would have more control over its own affairs, was offered last year soon after President B.J. Habibie came to power, and it has been given short shrift by most Timorese. "It was Parliament which formally accepted East Timor's integration into Indonesia in 1976, so it's a legal nicety," one senior official said. "But basically there's been a recognition that the East Timor situation has to be resolved one way or another."

Offer to move Gusmao

Wednesday's offer included a proposal to move jailed guerrilla leader Xanana Gusmao to some form of house arrest or "special jail"; he has been in a Jakarta prison since being detained on separatist charges in 1993.

Oddly, the offer is more than Indonesia's main opponents in East Timor have been demanding. Mr. Gusmao and Nobel Prize winners Jose Ramos Horta and Bishop Carlos Ximenes Belo have been advocating a referendum on the territory's future. Mr. Belo said Timorese should still be given the chance to choose between independence and special autonomy. "Referendum is an embodiment of East Timorese sovereignty to determine their future," he said from the East Timor capital, Dili. Exile leader Mr. Horta was more dismissive: "I am very skeptical nowadays about whatever they say in Jakarta because they change their mind so often," he said from his home in Australia.

Other East Timorese figures said they feared that at best Indonesia was toying with East Timorese aspirations and at worst repeating mistakes of its Portuguese predecessor by not preparing a smooth transition to independence. "Indonesia may be leaving East Timor like Portugal – too quickly," said parliamentarian Salvador Soares. "If it's based on good intentions, then it's good; if it's out of fatigue, then it won't be."

Some senior Indonesian officials voiced similar fears. One said the decision, made at a cabinet meeting Tuesday, had drawn sighs of relief from the three institutions most involved with East Timor: the Foreign Ministry, Interior Ministry and armed forces. "They've just had it," he said.

But the official added that if the MPR goes ahead as expected, independence could be granted by Jan. 1. "I'm worried about the implications," he said. "It will create heightened tensions between those in East Timor who are for and against independence."

Rising tensions

Indeed, some suspect Indonesia may be intentionally exacerbating tensions in the territory for its own ends. Residents say clashes between rival groups in East Timor have increased in recent months, forcing hundreds if not thousands of Timorese to flee their homes. Some of the gangs are semi-official vigilantes armed by the military, residents say. Mr. Horta said he believed that more than 100 people had died at the hands of such gangs in recent months, a figure that residents say may not be far off the mark. "It's a very serious problem," said one Dili resident.

It wasn't clear why Indonesia has made the offer now, or how it would be carried out. Officials said it wasn't linked to Thursday's UN-sponsored meeting in New York between foreign ministers from Indonesia and Portugal, part of a long-running and largely fruitless effort to resolve the issue. The UN still regards Portugal as the administering power; Indonesia invaded the territory within a few months of Lisbon's withdrawal in 1975 and formally annexed it the following year.

But officials said the offer had largely made the talks irrelevant. "For the moment the thinking is the diplomatic ritual will go on, for as long as the special status is an option. But the very fact the independence option is there will make it meaningless," one official said. The offer comes after years of dogged refusal to even consider talks with Timorese leaders such as Mr. Horta. But diplomats and officials said they feared the sudden about-face would bring its own problems. A coalition government would be hard to form or sustain given the current fissures in East Timor, they said. "They've got to prepare a transition," said one Indonesian diplomat. "That's the real issue." One senior official acknowledged such fears, but said, "I don't think we will abandon East Timor completely."