East Timor's former ruling party chief will sit in parliament with the opposition despite insisting the country's new government is illegitimate and has no right to rule.

Former Prime Minister Mari Alkatiri, who heads the Fretilin party, urged supporters to remain peaceful following days of sporadic unrest since a new government was announced last week.

Fretilin won the highest number of votes in the June election but was unable to cobble together a coalition to govern. A coalition of parties headed by former president Xanana Gusmao has now formed a government.

"Fretilin continues to say that this government does not have the legitimacy to govern, but it does not want to use violence in facing anyone," Mr Alkatiri said.

"We have gone down to explain to our active members that the opposition in parliament is important," he said, adding that a parliament without an opposition would proceed "lamely".

Fretilin has withdrawn an earlier threat to boycott parliament if it not asked to form a government, but its MPs have still not turned up in parliament. "We are not boycotting the parliament, we have just been absent," Alkatiri said, adding that lawmakers would return soon.

He also said that Fretilin members may not be to blame for the unrest – which has involved arson, assaults, and rock-throwing. "We suspect that it was not Fretilin who did this but people using the name of Fretilin to conduct violence and sully the party's name, as our members have a high level of discipline," Mr Alkatiri said.

Mr Alkatiri stepped down last year after unrest on Dili's streets between security force factions took the lives of at least 37 people and forced international peacekeepers to be deployed to restore order.