Dili – East Timorese leaders, returning home from a European tour, expressed optimism Tuesday about continued European Union aid but said Dili's expectations should be "realistic".

Acknowledging that crises like Iraq were syphoning "billions" from aid budgets, President Xanana Gusmao said he was convinced that European governments "accompany our difficulties, know our difficulties and want to continue helping us to be a success story".

Gusmao, speaking at a news conference on his return from Europe, underlined that Dili's expectations must be "realistic".

He added, however, that his talks in Italy and Britain convinced him that East Timor remained on Europe's agenda.

Also participating in the news conference, Foreign Minister Josi Ramos Horta noted that East Timor had enjoyed a "disproportionate" amount of European aid in the last few years. "In per capita terms, East Timor has received more aid from the EU than any other country" in Southeast Asia, Ramos Horta said.

In July, the EU's external relations commissioner, Chris Patten, told Lusa that Brussels' aid to Dili would likely be cut by two- thirds to about USD 8 million in 2004.

Dili, he added, had already received some USD 140 million in EU assistance. Diplomats have told Lusa that, beyond reduced direct aid to Dili, the EU was considering a "significant aid package" in the framework of the bloc's aid and trade agreement with the so-called ACP countries of Africa, the Caribbean and the Pacific.