Rosa Garcia, Dili – East Timor's influential Catholic clergy on Tuesday rallied thousands to protest against Dili's "dictatorship regime" in the latest sign of a growing rift between church and state in the fledgling country.

More than 5,000 people gathered outside government offices to demand Prime Minister Mari Alkatiri's resignation in the peaceful demonstration, one of the largest displays of anger since East Timor gained sovereignty in May 2002.

The protest was sparked by the government's decision to drop mandatory religious education from the national school curriculum, but is the latest in a series of disagreements between the country's leaders and the church.

The church has also expressed outrage over Dili's move to drop trials over atrocities committed by Jakarta-backed militias during a 1999 plebiscite which saw East Timor emerge from a quarter of a century of Indonesian occupation.

Father Benancio Araujo, a spokesman for Dili Diocese, said protesters would continue their rally for the rest of the week, but would cease if the government agreed to hold talks.

"We will remain here tomorrow and the days after. We are fighting the dictatorship regime of Alkatiri," the priest shouted to the crowd, which responded with repeated cries of: "Justice, justice and truth."

Placards reading "fight against the Alkatiri regime" and "the defender of truth and justice" were held aloft by the protesters.

The priest also called on members of the church, a legacy of Portuguese colonial days, to summon people from beyond the capital to "topple the anti-democratic regime".

Alkatiri who stayed inside his office during the demonstration, issued a statement saying he was willing to talk but was unhappy that the church had organised the protest.

"The government still wants to open a dialogue with the Catholic church, but this demonstration today does not help to create conditions for dialogue," he said.

East Timor's Catholic bishop Alberto Ricardo da Silva earlier this year expressed opposition to a deal between Timorese and Indonesian leaders to drop trials over the atrocities committed during the country's independence process.

Indonesia's President Susilo Bambang Yudhoyono and his Timorese counterpart Xanana Gusmao last month formalised a deal to form a Truth and Friendship Commission to deal with crimes during Indonesia's scorched earth withdrawal.

The United Nations has refused to endorse the deal, proposing instead a Commission of Experts to assess why a 1999 Security Council resolution to try those accused of war crimes has failed.

A spokesman for Alkatiri told AFP that da Silva had earlier this month sent a strongly-worded statement criticising the government for failing to listen to the church, which had previously demanded a say in the country's running.

Alkatiri responded, accusing the church of "behaving like a political party", and saying that his government had the legitimacy to agree on the commission and make the education ruling.

Alkatiri was the apparent target of an outbreak of violence in East Timor in December 2002, when riots saw 10 buildings torched or damaged in Dili, including the prime minister's home and houses owned by two of his brothers.

Two people died and 25 were injured in the violence, which was blamed both on anti-government protesters and pro-Jakarta militiamen.