Jakarta – East Timorese guerrilla leader Xanana Gusmao will be allowed to leave the Jakarta residence where he is kept under house arrest for talks on the future of his bloodied homeland, an Indonesian official said on Wednesday.

"Xanana will be allowed to attend East Timorese talks between pro-independence and pro-integration figureheads which would be held in a neutral place outside his house," Indonesia's Ambassador at Large for East Timor, Lopez Da Cruz, told Reuters.

"We have notified Xanana and he has agreed to attend the meeting," Da Cruz said. Da Cruz added the meeting would be held as soon as possible but did not give a specific timeframe.

"Looking at Xanana's status it would be best to have the meeting in Jakarta," Da Cruz said when asked whether the meeting would take place in East Timor or not.

Indonesian Foreign Minister Ali Alatas told Reuters earlier this week that Gusmao would be eventually freed whether East Timor chooses to remain with Indonesia or become independent.

President B.J. Habibie wants the East Timor issue resolved by January. This means Gusmao, jailed for 20 years in 1992 for leading pro-independence rebels, could be released as soon as next year.

"Then he would be able to go back to East Timor, if he so desires, to take part in the setting up of an autonomous province in East Timor," Alatas said.