Mark Dodd, Dili – Falintil guerillas, acting as scouts for Portuguese peacekeepers, have for the first time opened fire on suspected militia members conducting cross-border raids from West Timor.

A Portuguese military spokesman, Captain Pedro Dias, confirmed yesterday that Falintil guerillas accompanying a patrol of Portuguese paratroops on a security sweep near the southern hamlet of Alas opened fire on Saturday after a militiaman was sighted raising his rifle.

In a gunfight yesterday, New Zealand peacekeepers shot dead a militia member south-west of Kulit, eight kilometres from the border. The shooting followed the sighting of a group of 15 heavily armed militiamen earlier in the day, a UN spokesman said.

Captain Mick Tafe said the group was well armed and equipped. Australian and New Zealand helicopters were late yesterday helping to track the other militia members.

In the clash near Alas, several hundred rounds of ammunition were fired in a 15-minute burst when the heavily armed Portuguese patrol and three accompanying Falintil scouts spotted three armed militiamen in dense bush. No shots were returned by the militia.

The incident was captured on video by the documentary-maker Max Stahl, who achieved fame with his footage of the 1991 Santa Cruz cemetery massacre. The video clearly shows three Falintil guerillas wearing Portuguese military fatigues and armed with an American M-16 and an Indonesian 7.62mm Beretta assault rifle and SS-1 – probably captured weapons.

Moments before shots were fired, Falintil scouts are shown pointing to intricately camouflaged hideouts and the smouldering remains of a campfire used by a group of suspected militia estimated to number between seven and 15, being tracked by the Portuguese paratroops.

"The operation is still going on," Captain Dias said yesterday. "The aim is to get the militia groups to surrender. We are still tracking these groups."

Falintil comprises about 1,200 armed fighters based in a UN-supervised cantonment at their mountain headquarters at Aileu, about 48 kilometres south of Dili. They have been strongly lobbying to be allowed a more active role in counter-insurgency operations against the militia, a role the Portuguese command now appears to endorse. Many Falintil veterans speak fluent Portuguese and once served in the Portuguese colonial army in East Timor.

Australian commanders are more ambivalent about cooperation with Falintil. Australian policy is that Falintil be deployed as liaison officers but be kept away from possible combat patrols. The Australian peacekeepers rely on tip-offs from locals about militia crossings from Indonesian West Timor, but the information is often too old to be of use for quick follow-up operations.The Falintil fighters' bushcraft and tracking skills are legendary.

The UN spokeswoman in Dili, Ms Barbara Reis, said yesterday that under new guidelines approved by the United Nations Security Council, Falintil guerillas were allowed to patrol with UN peacekeepers and if necessary use their personal weapons if threatened.