Things are quiet in Dili. At a government rally in front of the governor's office, Dili Mayor Domingus Soares publicly announced that Eurico Guterres, the head of the Aitarak "death squad" and vice-commander of all Abri-sponsored death squads, will be in charge of security and stability in East Timor.

There was a huge paramilitary rally in Aileu, one hour from Dili. Several journalists travelled with Basilio do Araujo.

There have been some strange developments here. Over the week, Basilio and paramilitary leaders have been saying publicly they wanted the Indonesian troops to leave East Timor! It seems during Saturday's paroxysm of violence in Dili, Eurico Guterres shouted at East Timor commander Tono Suratman asking him to leave the territory.

When Basilio was questioned about this, he answered that they wanted to show the world that East Timorese supported continued integration with Indonesia and they were not doing it just because of fear of ABRI troops. He wants ABRI to leave in the period leading up to and during the scheduled vote on autonomy in July. After a vote in favour of autonomy, Basilio wants the Indonesian troops back.

On the surface this seems very odd – the least stupid! It is clear that almost everybody wants independence and wants to do away with Indonesian rule. Xanana and other independence leaders have assumed that the pro-Indonesia thugs and groupings will dissipate or even vanish once ABRI troops left.

But herein lies the overwhelming fear! The paramilitary leaders think they have and will further develop a large enough, well-armed force to hold sway over a majority of the people here for a limited time even without the troops. They certainly have momentum and they have forced and bought paramilitary involvement by the thousands. The area west of Dili, north to south, has seen numerous pro-Indonesia rallies and people are afraid to oppose them even verbally. They have set-up checkpoints on many of the roads in this area.

There is a chilling prospect of a war, later this year, between the paramilitaries and the numerically larger but ill-armed independence forces.

The paramilitaries' strongholds can easily be supported by Indonesia from West Timor. This puts many pieces of the puzzle together: economic interests (the western slice is the richest), the military destabilisation analysis and the recent statements by Basilio. If this becomes increasingly likely, the independence movement will have to begin more serious preparations to fight en masse.

Also there are rumors of growing splits among the military in Dili. Yesterday and last night, some soldiers shot in the air to scare off paramilitary groups hunting former pro-integration, now pro-independence activists. The Air Force in particular is seen least willing to give the paramilitary groups license to kill.