Lisbon – East Timor's government and the nation's powerful Roman Catholic Church have settled a dispute over an end to compulsory religious classes in state schools, East Timorese Prime Minister Mari Alkatari said Thursday.

He told Lisbon-based Radio Renascenca he reached the deal Wednesday during a meeting with the former Portuguese colony's two bishops although he refused to say if the government had agreed to go back on its decision to end the classes.

"There is an agreement in principle. I can't say more because I am the prime minister and I still have to bring the issue to cabinet," he said, adding the new law had been misinterpreted.

"What I can guarantee is that we came out of our meeting with a consensus over how to interpret things."

East Timor's secular government decreed in February that religion should not be a compulsory subject in government schools, although it would be made available as an option for all students if they wished.

Thousands of people have taken part in peaceful rallies in Dili, the capital of the predominantly Roman Catholic country, over the past week to demand that Alkatari, a Muslim, resign over the issue.

"I don't see any reason for the protests to continue now that there is an agreement in principle," Alkatari said.

Earlier this week he hinted in another interview with Radio Renascenca that his government could go back on the decision to end compulsory religious classes but said the final decision would lie with the cabinet.

About 96 percent of East Timor's 800,000 people are Roman Catholic and there are Muslim and Protestant minorities.

East Timor gained independence in May 2002, three years after a referendum supervised by the United Nations brought an end to mainly-Muslim Indonesia's occupation of the territory.