Jenny Grant – The Indonesian military not only turned a blind eye to Saturday's militia attacks in Dili but had prior knowledge of the planned targets at the most senior level, diplomatic sources claimed yesterday.

The sources said the militia attack was discussed at a senior security co-ordination meeting in Jakarta last week. The meeting, held at the Cilangkap armed forces headquarters in Jakarta, was attended by military chief General Wiranto, Udayana military commander Major General Adam Damiri and East Timor military commander Colonel Tono Suratman, the sources said.

Witnesses said what few police and soldiers were on the streets calmly waved the militia trucks on. "Some of them were even smiling as the attacks were under way," said one witness.

Yesterday, militiamen were allowed to roam through areas of Dili and surround people's homes, unchecked by conventional forces.

Australian Prime Minister John Howard said he would contact President Bacharuddin Habibie about "growing evidence" that Indonesian troops failed to prevent the militia killings.

"You would have to wonder whether these pro-integration militiamen are not getting some kind of permissive response from the Indonesian Army," Mr Howard said.

Police have arrested only six members of the Red and White Iron militia, which is being held responsible. A source in Dili said: "We dismiss arrests of low-level thugs as a way of excusing what General Wiranto has laid out."

The military is keen to stay in East Timor, despite Mr Habibie's offer in January of independence if autonomy is rejected by the people.