Karen Polglaze, Jakarta – Australia and Indonesia now shared policy positions on the troubled territory of East Timor, Australian Foreign Minister Alexander Downer said in Jakarta today.

Speaking after a meeting with Indonesian President BJ Habibie, Mr Downer said that he was heartened by the discussion and that Mr Habibie had carefully thought out that steps that lay ahead in resolving the problem of East Timor.

As tensions remain high in the disputed half-island, Mr Downer once again refused to commit Australia to providing troops for a peacekeeping force should it be determined that intervention were necessary.

Ahead of a meeting later today with jailed resistance leader Jose Xanana Gusmao, Mr Downer appealed for restraint on all sides of the debate. "I think now the positions of Australia and Indonesia on this issue are very close," he said.

"I think the president has thought very carefully about the step ahead. I think provided responsibility and restraint in East Timor is exercised, the problems of East Timor can be resolved successfully according to the wishes of the people of East Timor."

Mr Downer said it would be preferable if there was disarmament in East Timor. Reports in today's English language Jakarta Press say that everyone in East Timor is now armed with either guns or machetes.

"In the meantime there, of course, has got to be a resolution of the political status of East Timor and the level of distrust based on a very sorry history is still high and it is going to take some time I think to achieve the confidence that's really necessary in East Timor."

Mr Downer arrived in Jakarta after two days of talks between delegations of Australian and Indonesian ministers in Bali.

During his trip to Bali, Mr Downer met with Indonesian Foreign Minister Ali Alatas to discuss the future of East Timor which Indonesia foreshadowed could be released from the republic should the East Timorese people reject Indonesia's offer of autonomy for the province.