Dili – Australia and Indonesia Monday traded accusations over a border clash between the multinational forces in East Timor and Indonesian troops, as Australia called for urgent top-level talks to defuse the row.

Indonesian Foreign Minister Ali Alatas said he would lodge a complaint with the United Nations, while Interfet commander Major General Peter Cosgrove flatly denied his men crossed into Indonesian territory.

"Even if it was an accident, because of the differences in maps, I think it was rather strange because Interfet is equipped with equipment said to be very sophisticated. How come they can make such a mistake?" Alatas said.

"We will protest it, of course. But Indonesia's stand is that we deeply regret it," he said as Indonesian MPs protested and demonstrators hurled rocks at the Australian embassy.

Ruling Golkar party MP Slamet Effendy Yusuf said: "If there are foreign forces that violate our sovereign territory, we should just shoot them."

Cosgrove said Jakarta knew his men had not crossed into West Timor, and said he had lodged a strong protest with local Indonesian military commanders.

The Indonesian military said Sunday night an Interfet patrol "trespassed" into Indonesian-ruled West Timor and shot dead one policeman and wounded another.

"I have protested in the strongest terms to local Indonesian army authorities," Cosgrove told Australia's ABC television in Dili.

"We have very accurate maps, and we also use a global positioning system device ... We know to within a few meters where we are.

"Quite plainly we were in East Timor. The Indonesian authorities know that, and no doubt the people that fired the shots also know that."

Australian Prime Minister John Howard told parliament in Canberra his government regarded the incident in the most serious terms and said he was seeking urgent discussions with Jakarta.

"Interfet personnel believe the incident took place in East Timor," Howard said. "It shows that some elements in TNI [the Indonesian military] may be disregarding the terms of the UN Security Council resolution 1264 and continuing to support militia groups."

Interfet spokesman Colonel Mark Kelly said the group that first fired on the Australian troops near the border town of Motaain were "wearing T-shirts and dressed in militia garb."

But he said the men were accompanied by units of the Indonesian police and armed forces. Details surrounding the incident were "still fuzzy."

Kelly also said talks between Cosgrove and Indonesian officers in Dili Sunday had agreed the incident "was well and truly inside East Timor." The Indonesian command statement admitted the border demarcation was vague.

Kelly denied Interfet troops were acting provocatively by approaching the collection of hamlets known as Motaain. "We have a mandate to take up to the border, firing weapons is not a good way of warning people that you are getting near a border."

He also said Cosgrove had ordered units operating along the border to take extra precautions after the incident, the first involving the two sides since Interfet arrived on September 20 to halt militia violence triggered by East Timor's August 30 vote to break away from Indonesia.

Meanwhile Xanana Gusmao, the former guerrilla commander tipped to become East Timor's first national leader, told reporters in Australia he thought the Indonesian military provoked the incident.

"They want to see how much the Australian troops are ready to fight." Gusmao also said he hoped to return home soon and set up an interim administration. "We know that we have a very, very difficult future," he said.

Kelly said Monday Interfet troops in southwest East Timor detained and questioned 80 people. The detentions came after reports of militia activity in Hatuvo and Cassa. All 80 were released when they were found to be unarmed, he said.

He said Interfet forces were continuing to deploy in the area as a part of the new "Westfor" command which will see a total of 3,000 troops in the volatile western area.

In the West Timor capital of Kupang, a battalion of hardened Kostrad (strategic reserve) soldiers, some 600 men, were seen disembarking from military planes from Ujung Pandang. One of the officers told reporters the men did not know where their assignment was and they were awaiting orders.

Australian Defence Minister John Moore said Monday nations involved in the peacekeeping operation would hold ministerial talks next month.