Rodney Dalton/New York, Sian Powell/Jakarta – Australia is trying to convince a divided UN Security Council that peacekeepers in East Timor should be replaced by police under a new mandate.

As well as arguing for the extension of the UN mandate, Australia's UN ambassador, John Dauth, will tell council members tomorrow that an armed emergency police response group, not soldiers, should deal with criminals along the border with West Timor.

It is understood Australia has convinced Britain and the US that peacekeepers are no longer needed. Its position puts it at odds with UN Secretary-General Kofi Annan, who has released a report calling for a reduced peacekeeping operation of about 350 soldiers after the mandate ends on May 20.

It has also dismayed East Timor. Foreign Minister Jose Ramos-Horta told The Australian: "We are all quite puzzled as to why Canberra, London and Washington want to differ from everybody else on this issue."

Mr Ramos-Horta will tell the Security Council East Timor needs a continued peacekeeper presence. "We, the Timorese, maintain a very close working relationship with the UN and they listen to us," he said. "Certain countries do not seem to think that our own views are very relevant."

In a detailed report on East Timor's progress towards self-sufficiency since achieving independence two years ago, Mr Annan concludes that "further assistance" to East Timor will make a "crucial difference". He argues the UN peacekeeping operation should remain for another year to maintain security and help East Timor develop judicial and administrative systems and a national police force. His special representative would remain in East Timor to oversee the civilian, police and military arms of the UN operation.

"At a time when either calm or instability can become self-reinforcing, it would be advisable to retain a military component ... for a further year, with modified tasks, to reduce the risk of destabilising incidents," Mr Annan says. He proposes that this "minimal" presence of 350 military, including 42 advisers, would "focus on the western districts, where the risk is greatest".

The UN has 2000 troops and police in East Timor, with Australia providing 309 soldiers, 21 police and seven observers. Under the Australian proposal, it would still provide up to a half of the military personnel.