Tito Belo, Dili – About a thousand students rallied outside East Timor's parliament on Wednesday to protest against a decision to buy 65 Toyota Land Cruisers – one for each member of parliament – in one of the world's poorest nations.

The protest comes amid surging food and fuel prices in a country where the average income is just 50 US cents per day and where 42 percent of the population is unemployed.

"Dismiss the parliament that doesn't care about the people," shouted protesters carrying East Timor flags in the capital, Dili. Last week, the parliament decided to purchase the new vehicles.

"The price of rice and oil has become higher and people are not able to buy basic needs. Why do they want to buy a good car?" Gaudencio de Sousa, coordinator for the rally, told Reuters, adding that parliament should provide benefits for the people, not its members.

The protesters urged the government to intervene to contain rising prices for food and oil, and warned they would hold bigger rallies if parliament did not revoke the order for new cars.

Fretilin, the opposition party, said it voted against the purchase proposal, but a member of the ruling coalition said it was neccessary for lawmakers to check on government projects.

"Parliament law allows... members to own a car to observe the implementation of the state budget in government institutions and application of government programmes in the districts," Fernando Gusmao of the Social Democrat Party, told Reuters.

Asia's youngest nation, East Timor, is struggling to achieve political and social stability, following violence in 2006 that killed 37 people and forced 150,000 people from their homes.

The government and the United Nations launched a programme early this year to relocate some 30,000 refugees living in camps that dot the capital.

The former Portuguese colony, invaded by Indonesia in 1975, won independence in a violence-marred vote organised by the United Nations in 1999. It became fully independent in 2002 after a period of United Nations administration. It has substantial energy resources but is only beginning to develop them.