Dili – East Timor violence could return to East Timor ahead of general elections next year, a conflict-prevention group warned Tuesday, recommending that the country's president and former prime minister sit out the polls to help reduce tensions.

Asia's newest nation is still in political limbo after rival armed factions clashed in the streets of the capital in April and May, killing more than 30 people and sending 150,000 others fleeing from their homes.

Foreign troops were deployed to restore order and a transitional government was installed until new polls could be held, but no one has yet been brought to justice for the bloodshed.

Much depends on an assessment by a UN Independent Special Commission of Inquiry, which will name individuals it deems responsible, though it has no authority to prosecute. The findings were supposed to be released Saturday, but publication has been delayed until later this month amid fears it could trigger more unrest.

In its latest evaluation of the situation in East Timor, the International Crisis Group, or ICG, advised President Xanana Gusmao and former Prime Minister Mari Alkatiri "to think the unthinkable – foregoing any role in the 2007 elections so new leaders can emerge."

Foreign efforts to help Dili create independent institutions and overcome divisions in the military and police will fail "unless the two are willing to get past mutual distrust and discuss how to overcome the security forces' polarization," the think tank said.

East Timor's brief lapse into chaos was sparked by Alkatiri's decision in March to fire 600 soldiers, or around a third of the army, who accused the military leadership of discrimination. But it goes back much further to allegiances formed when East Timor was under Indonesian rule.

The ICG said Gusmao's public comments had soured the atmosphere by drawing "on wells of bitterness and personal betrayal." His power struggle with Alkatiri and intervention has made it "almost impossible to get members of the political elite into the same room, let alone work out a common strategy for resolving the crisis," it said.

At the peak of the violence, police and army factions fought gunbattles in the street as gangs roamed Dili burning and looting and hunting down perceived opponents with machetes. An estimated 100,000 people remain displaced, half of them in the capital of the world's poorest nation, measured per capita.

The ICG report, "Resolution of the Crisis in Timor Leste," says that internal divisions pose the gravest threat to elections and that "the most important guarantor against violence might be for the more controversial figures in the capital to sit this election out voluntarily."

It does not make any recommendations on the role of Jose Ramos-Horta, a Nobel Peace Prize laureate, who emerged from the crisis as the head of the transitional government.

Calm returned shortly after the arrival of foreign peacekeepers, but underlying problems have not been resolved and a long-term UN peace force is seen as key to maintaining order.

East Timor broke from 24 years of brutal Indonesian rule in 1999 in a UN-sponsored referendum.

Its future, the ICG said, lies in the hands of less than a dozen key players whose political will and creativity is needed to put East Timor, once a UN success story in nation building, back on track.