Don Greenlees, Jakarta – Militia groups opposed to East Timor's separation from Indonesia are a spent force, incapable of presenting a military threat across the border from West Timor, according to Western diplomats and military officers.

The decline of militia power coincides with evidence of a tougher approach to armed civilians, instigated by Indonesian Army commander Major-General Willem da Costa. Western diplomats believe the erosion of militia influence is so great the UN and Indonesia will be able to demilitarise the border area within two years. This will allow the withdrawal of more than a battalion of Australian troops – the biggest overseas deployment since Vietnam.

Peacekeeping force commanders in East Timor say there has been no exchange of fire with any militia groups since June 14. In the past 12 months, there have been 30 militia sightings, with nine of those confirmed. "We don't regard the militia members in West Timor as a threat to East Timor anymore," Lieutenant-Colonel Jan Fredrik Drangholt, of the peacekeeping force, said yesterday.

The improved security climate has become increasingly apparent since Major-General da Costa launched aggressive sweeps of refugee camps to disarm civilians, and warned civilians seen in possession of weapons they risked being shot, say military analysts.

They say Major General da Costa, an ethnic East Timorese from the Oecussi enclave, removed senior officers seen as sympathising with militia and has discouraged hardliners, such as former Dili militia commander Eurico Guterres, from spending time in West Timor in recent months.

With less room to manoeuvre politically, ex-commanders of the militia units raised and sponsored by the Indonesian military to prevent East Timorese voting for independence in the 1999 referendum have started reaching out to former enemies in East Timor in the hope of making a peaceful return.

During a visit to West Timor by independence leader Xanana Gusmao this week, militia chief Joao Tavares said pro-independence and pro-Indonesian East Timorese needed to "live in peace, side by side". "We want to hand peace down to our children," Mr Tavares said after a meeting with Mr Gusmao in the West Timor capital, Kupang.

Indonesian authorities estimate 136,000 East Timorese refugees remain in West Timor more than two years after Indonesian military and militia groups carried out a scorched-earth policy in retaliation for their defeat in the referendum. Western officials say the figure is probably below 100,000.

The weaker bargaining position of militia leaders has encouraged refugee returns, with two prominent militia figures, Cancio Lopes de Carvalho and Joanico Cesario Belo, signalling a willingness to return along with their followers. About 5000 East Timorese have already returned under Lopes de Carvalho's direction.

Lieutenant-Colonel Drangholt said security concerns on the border centred more on smuggling and customs problems than militia activity. Peacekeeping force and foreign military officers, however, caution that militia groups still have about 400 modern weapons hidden in West Timor.