Dili – President Xanana Gusmao on Friday urged East Timorese to remain calm as the country attempts to solve a slew of problems heading into its first New Year celebrations since gaining independence.

Gusmao said that his fledgling country needed a better legal system to help support the creation of badly needed jobs, rein in corrupt officials and bolster the government's administration.

"Let us all wish that the New Year of 2003 brings us improvements particularly in the area of justice, which still needs a major push ... to become a truly respected institution," he said in a national radio broadcast.

East Timor gained full independence in May, after a period of transitional rule by the United Nations following Indonesia's brutal 24-year occupation and four centuries of Portuguese colonial rule.

However, many of East Timor's 800,000 citizens complain they have seen little benefit from independence.

Gusmao called for peace and tolerance among East Timorese following civil unrest earlier this month, the worst to hit the country since its founding.

Mobs angered by rising unemployment and prices rampaged through the provincial capital, Dili, burning buildings and looting hotels. At least two people were killed. Analysts also said that the unrest was caused by anger at government corruption and inefficiency.

Anti-corruption activists demanded a government watchdog to investigate claims that senior officials asked for money and cars to foreign businesspeople investing in East Timor.

"To the people as a whole, I continue to urge for calm, because violence does not help us build but rather destroys all that is being created, or already exists, at great cost and difficulty," Gusmao said.

The government has had difficulties recruiting civil servants because of low wages, he said, adding his office will provide information and advice to youths who have left the country to seek work in Portugal.