Dini Sari Djalal, Atambua – Claudio de Jesus Lai trusts very few people. The East Timorese anti-independence activist mans the gates of Tenubot refugee camp in Atambua, West Timor, sternly interrogating visitors. "Western countries are using Asians to spy on us," he snaps at a visiting reporter. "How do I know you're not one of them?"

Lai, an aide to East Timor's Indonesian-appointed governor, Abilio Soares, is suspicious even of the Indonesian government, despite having worked for it through the territory's chaotic campaign for independence. "Once I considered buying land here in Atambua," he says, "but I didn't, because I thought Indonesia would never give up East Timor."

Tenubot is Lai's fiefdom – a sprawl of tarpaulin huts crammed with frightened refugees who obediently heed his word. The red-and-white Indonesian flag flaps over the tents. The camp's 600 families, mostly from the western part of East Timor, seem resigned to their languid camp lives. Nonetheless fear hangs over the place. Armed men patrol the alleys. They are the only ones willing to speak, and they share Lai's mood of angry betrayal.

The fate of thousands, perhaps hundreds of thousands, of East Timorese refugees – and of thousands of pro-Jakarta militiamen – is slowly beginning to take shape in places like Atambua. Though the United Nations has received the go-ahead to start repatriating refugees to East Timor, tens of thousands have already become part, willingly or otherwise, of Indonesian government programmes that will see them resettled elsewhere. Meanwhile, bitterness is growing among militia members, who worry that the Indonesian armed forces, having supported their brutal campaign to forestall East Timor's independence, may now be abandoning them.

A mood of resignation also seems to have set in at the higher levels of the Indonesian government, now that East Timor's independence has become assured. Armed-forces chief Gen. Wiranto and other senior Indonesian officials, whose role in East Timor has been less than clear, seem to understand that if they don't disarm the militias and ease the refugee crisis they risk further world condemnation and prolonged suspension of vitally needed aid.

Despite recent clashes between the UN-backed forces in East Timor and armed militias, Jakarta maintains that orders were issued in early October for Indonesian soldiers to disarm their militia allies. After visiting the scene of a recent border clash between UN peacekeepers and Indonesian policemen, Wiranto declared nearby Atambua a militia-free zone and ordered militia members back to camps further inside West Timor.

For the militiamen, an armed return to East Timor could be suicidal. The militias claim 53,000 recruits, but Western intelligence sources put the number of potential guerrilla fighters at no more than 7,000, including a 2,000-strong hard-core trained by the Indonesian special forces, or Kopassus.

Meanwhile, UN-backed troops have established a firm hold of the border areas of East Timor, and any insurgency would face serious food-supply problems. In addition, there would be pressure on the Indonesian military not to support them. Says one pro-Jakarta supporter in Atambua: "Why doesn't Wiranto just admit they've given up on us? I tell the militias, why do you continue to believe he will help?"

There are plenty of reasons why Wiranto would be hesitant to support them. UN officials are now saying the death toll in the post-referendum rampage by militiamen and Indonesian soldiers may be less than originally feared. But Indonesia's military leadership is nonetheless known to be deeply worried about the prospect of war-crimes trials. There are other serious concerns, too. In response to the Timor situation, the United States is withholding critical spare parts for Indonesia's 20-plus C-130 transport aircraft – the ageing workhorses essential for moving troops and equipment around the country in the event of civil unrest or other emergencies.

Militia leaders continue to make threats, and have moved forces back and forth – up to the East Timorese border and then away. But some members are starting to despair. "Look at what's become of us," says Filomeno Dos Santos, a commander of a militia group called Mahidomi, whose name means Live and Die for Autonomy. "We are fighting with all our might, but we are still here." Dos Santos's followers and their families live in a squalid camp outside Atambua.

Of course, they're better off than most of the many thousands of refugees that the International Committee of the Red Cross says are encamped in West Timor. The UN is sending at least 300 people a day back to East Timor by charter flight, and it plans to start moving up to 5,000 refugees a day by sea. But in the meantime, Jakarta seems intent on pushing ahead with plans to resettle many in other parts of Indonesia. In recent weeks, officials have been distributing registration cards for transmigration – a people-moving programme long established in Indonesia. Refugee families are promised a house, a hectare of land, rice and financial allowances if they agree to resettle in West Timor or go elsewhere in Indonesia. For many, fearful of the watchful militias, the offer is one they're unable to refuse.

Transmigration Minister Hendropriyono, an active three-star general who has spent much of his career as an intelligence officer in the special forces, has pledged to move the remaining refugees within the next two months, some to distant locations such as the Maluku islands. More than 2,000 East Timorese have already been sent to Irian Jaya. The pace and enthusiasm at which the transmigration plans have proceeded is astonishing. The Public Works Ministry, for example, has speedily erected wooden shacks in some of the camps – infrastructure that took months to provide in other trouble spots such as West Kalimantan.

Aid organizations say it's difficult to tell who really wants to go. "It's all over already," says one foreign aid worker. "The militia are already in control of the people in the camps." Indeed, men in militia shirts monitor interviews with the refugees. As one farmer says he has signed up for transmigration, his eyes never leave the ground. After neighbours leave the hut, he admits: "I'm doing it because I'm scared."