[This is an exclusive extract from "Appeasing Jakarta: Australia's Complicity in the East Timor Tragedy", the second in the Quarterly Essay series published by Black Inc., Melbourne, $9.95.]

John Birmingham – The battalion's nickname was strictly and bitterly ironic: "The Brave Ones". A fighting unit with a proud history of child murder, rape, plunder and riot.

You could tell when Battalion 745 had passed through because of their signature legacy of shallow graves, burnt buildings and drinking wells crammed with the mutilated remains of the dead peasants they were pledged to protect.

In September, 1999, they were quartered at the eastern end of Timor, at a barracks complex just north of Los Palos, a forlorn sort of place that had never really recovered from the fighting of 1975. Battalion 745, the Brave Ones, were given the task by Jakarta of making sure things stayed quiet.

They were a territorial outfit, a bunch of second-raters, with a good percentage of their numbers made up by local men. Their training, equipment and operational doctrine were all inferior to the main force units of Kostrad, the army's strategic reserve, and Kopassus, the fearsome and much-hated special forces.

They were not quite as bad as the militia, the military equivalent of those scabrous, stringy-legged wild dogs that haunt the streets of so many towns throughout the archipelago. But 745 were not what you'd call a disciplined or even a remotely formidable military force.

September 21 was the Brave Ones' last full day in East Timor and they held nothing back. It was also a day on which they brushed up close against their own destruction and all but touched off a war between Indonesia and Australia.

Their first victims were Abreu and Egas da Costa, murdered just a few minutes after the convoy had left their own barracks ablaze at Laga. Their deaths were witnessed by Zelia Maria Barbosa Pinto, who hid in an irrigation ditch as she heard the convoy approaching. The da Costa brothers, doubling on a motorbike, weren't as lucky. Their own engine noise masked the approach of the trucks until it was too late and the battalion outriders were on top of them. Somebody in the convoy yelled out that they were terrorists, and as Abreu backed away from the motorcycle and screamed at his brother, "We're going to die," the soldiers opened up on them.

Someone shot Abreu's leg out from under him as he ran. He fell, staggered up and made it a few more feet before a round slapped into the back of his skull and pitched him into the paddy water. His brother didn't get that far; he was shot in the stomach before he could run more than 10 feet. Zelia Pinto watched a soldier walk over and bayonet him.

745, joined by members of the Team Alpha militia, drove through the old Portuguese quarter of Baucau, the second city of East Timor and a major staging point for TNI operations throughout the centre and eastern reaches of the island. From there they took the coast road west for Dili.

Before they drove out later that evening on the last leg of their retreat, a local military commander asked them to refrain from further bloodshed.

Within half an hour they had driven into a potentially catastrophic showdown with the 2nd Cavalry Regiment of the Australian Army.

The Australian modified light armored vehicle, the ASLAV to its friends, is really not that light. Or friendly. It weighs in at about 13 tonnes, depending on its configuration. Standing next to an ASLAV, your average, machete-wielding villain is immediately dwarfed by its blunt mass and, more subtly, by the promise of mayhem contained within its brutish frame. The ASLAV's offensive capabilities and the training and commitment of the men who drove them were the reasons why armed peacekeepers were never going to be welcome in East Timor in the pre-ballot period.

With a neutral, heavily armed force in place, the TNI's scorched earth policy would have been prohibitively expensive, or even impossible to carry through in the face of opposition from the likes of the 2nd Cavalry Regiment.

The TNI had many more troops in place, but behind the comparatively small number of InterFET personnel stood the threat of intervention by the armed forces of those states that had contributed them, including (though not limited to) Australia's traditional allies, the United States and Britain.

The appearance of that foreign armor on Dili's ruined streets signalled to all sides in the East Timor conflict that things had changed; specifically, the immunity to armed sanction enjoyed by pro-Jakarta forces had ended. This transitional phase was the most dangerous moment of the crisis, the point at which miscalculation by InterFET or foolhardiness by militia or TNI units could easily flash into a wider, international conflict.

Into this situation rode the Brave Ones. On the night of September 21, the second day of InterFET's mission, half-a-dozen ASLAVs, disbursed in two groups, were squatting astride the main east-west road through Dili.

During the taut period immediately before and after the arrival of Australian combat forces, Dili was still infested with hundreds of militia bandits and ill-disciplined Indonesian troops.

At all hours of the day and night they tore through the devastated city in trucks and cars, screaming abuse and levelling their weapons at the Australians. Under the rules of engagement they could have been shot at any time for making such threatening gestures, but the Australian troops restrained themselves, despite the heat and stress and physical demands of carrying full combat loads. That stress should not be underestimated. Foot patrols ran all day and night. Sleep was snatched in short bursts among rubble and burning refuse.

Tensions rose as the Australians, most of them very young men, were at last close enough to reach out and touch the material consequence of the TNI's failure. Bodies rotted in drinking wells, drainage ditches and ruined buildings.

Some bodies bore signs of torture and all had been mutilated. In some cases, hands and heads had been cut off in a crude and brutal attempt to hide the victim's identity. The body of a young woman, her hands bound and throat cut, abandoned in a toilet area awash with her blood, was a shocking discovery for the diggers who found her.

Around 10 in the evening, the Brave Ones' motorcycles, riding point on what had grown into a 60-truck convoy, ran up hard against the ASLAV checkpoint. After looting and killing their way across the island from Los Palos, 745 and their Team Alpha cohorts were emotionally unprepared for any resistance.

They had been ordered to chill out back at the Dili barracks, but as the convoy growled and squeaked to a halt in the dark, angry militiamen and soldiers began to shout and wave at the Australians, demanding they move aside.

The Brave Ones' vanguard presented as a sort of B-movie vision of some pirate biker gang from hell, a rat bastard outfit in black T-shirts, camouflage pants, long hair and bandanas, with axes in their eyes and guns at the ready.

The Australians – assault pioneers, a couple of rifle platoons and six pairs of snipers – were all kitted out with body armor and night vision equipment, giving them a distinctly threatening, insectile, otherworldly appearance beneath their kevlar helmets.

Unbeknown to the territorials and militia, who were blind in the dark, their every move was being observed in the cool green glow of low-light amplification systems.

The Australian ranking officers, a pair of lieutenants, one of whom spoke Bahasa, informed the motorcycle escort of orders to detain anyone they came across armed and not in uniform. The riders revved their bikes as their spokesman blustered and demanded passage through the blockade. The voices grew loud and more agitated as it became obvious that 745 might not be allowed through immediately.

As more Australian soldiers quietly deployed to support their leader, Indonesians and Timorese dropped from the backs of trucks, unshipping their weapons, crying out, demanding to know the cause of the delay.

Some of the hard chargers of Team Alpha and 745 began to shoulder their rifles, unaware they could be seen in the dark. Under the UN-sanctioned rules of engagement, they were now dead men. But the Australians, outnumbered many times over, did not open up on them. They did not respond in any obvious way. No orders were given.

But each man slowly raised his Austeyr F 88 from the hip. Guns on the ASLAVS tracked around smoothly, settling on the trucks full of Indonesian soldiers. Photon streams poured out of laser designators, painting bright dots – visible only through the diggers' night vision goggles – on the foreheads and chests of those men fated to die first.

As InterFET commander Major-General Peter Cosgrove said later, it is no exaggeration to say that the future of Australia's relationship with Indonesia hung in the balance for the next few minutes. So tenuous was the situation in Dili, and so poisonous was the relationship between the two countries at that moment, that everything then turned on the actions of the young lieutenants and the men standing behind them.

Cosgrove has used the example of this roadblock more than once to illustrate the importance of training, discipline and modern equipment. He saw it, quite rightly, as a small moment of vindication.

But it was also a failure, a nexus point at which the full weight of 24 years of accumulated strategic folly, moral poverty, infamy, lies, naivete and self-delusion suddenly dropped on to the shoulders of a handful of young soldiers.