At least 20 people have been killed and the western East Timorese town of Maliana set ablaze and all but destroyed.
An Australian observer who left the town early this afternoon in an armed convoy of Indonesian police said over 200 houses were burning in the town and over 100 people had taken refuge in the Indonesian police compound.
The observer said, "the only people in the streets when we left were the militia and the military and the destruction of the town was continuing."
The United Nations abandoned the town earlier today amid fears that if they did not leave Maliana now, they may not have left at all.
Victims of the bloodshed include two local UN staff. It is understood all of Indonesia's 200 special mobile police based in Maliana have retreated with the UN.
Spokesman David Wimhurst said the 430,000 ballot papers were mixed together to prevent Identification of which areas favour independence and which want to remain with Indonesia.
The UN says the security situation in the territory is deteriorating rapidly. It is understood militia have also taken over and Indonesian television tower preventing UN TV broadcasts to some areas of East Timor.
And in the other western town of Liquisa, 20 to 30 houses have been burnt to the ground and militia have been active in the west and east of Dili.
While in Gleno, also west of Dili, civil order had completely broken down according to a UN official, with militia on every street corner and houses were being destroyed.
Indonesian police are still present but are confined to their compound, protecting themselves from the militia.
South of Dili, it is reported at least 15 are dead in the town of Holo Ruo and 25 houses burnt down after militia attacked overnight.
While the situation in Dili remains extremely tense with a massive fire engulfing the central municipal market as the sun went down.
Pro-independence East Timorese students were reportedly also under attack from militia in the area of the Santa Cruz cemetery.
And a group of some 75 journalists left the territory today as a media group issued an alert for those left behind.
Their flight left as the Safety Office for Media in East Timor (SOMET) issued a "high alert" for journalists still working in the violence-torn territory, cautioning them to cancel all unnecesary travel.
Troops
Three Hercules military transport planes landed in the East Timorese capital of Dili today, carrying hundreds of soldiers as security continued to worsen in the territory.
Their exact number or unit was unknown as journalists were not allowed to approach the tarmac, but they filled 14 waiting trucks, an AFP photographer said. Indonesian Foreign Minister Ali Alatas yesterday said that troops had been ordered to assist the Indonesian police ensure security in East Timor, amid international outrage over unchecked violence by pro-Jakarta militias.
While the Australian Government says Australia could deploy peacekeepers to East Timor very quickly if the need arises. Indonesia is still opposed to a peacekeeping force.
The Defence Minister, John Moore, has announced an extra 24 troops will fly to East Timor as part of the United Nations increased presence there announced after Monday's referendum.
But the Government maintains there can be no peacekeeping force unless Indonesia agrees to one.
Concerns
The Australian Prime Minister has telephoned Indonesian President BJ Habibie to reinforce Australia's concerns about the violence in East Timor. Mr Howard rang the President late this afternoon.
The Prime Minister's office says Mr Howard expressed his concerns about the latest violence and killings in East Timor and their implications for the safety of Australians in the province.
He stressed the need for Indonesia to maintain law and order. It is understood President Habibie told Mr Howard Indonesia would fulfil its responsibilities on law enforcement.
But it is not certain whether Mr Howard called for Indonesia to allow a peacekeeping force into the province or whether the President gave any sign he would agree to one.