Jakarta is to give East Timor refugees in West Timor just over three months to decide if they want to stay in Indonesia or go home, the official Indonesian news agency reported yesterday.
The announcement comes at a time of increasing tension on the southern section of the border due to the presence of militiamen among those returning.
A New Zealand-led battalion of the International Force in East Timor (Interfet) is processing refugees, mainly women and children, returning to the south-west of East Timor from Indonesian West Timor.
It includes a platoon of 30 Irish Rangers used mainly for reconnaissance patrolling.
Since Tuesday, some 2,000 refugees crossed into East Timor at a newly-opened border post at Salale.
A New Zealand officer, Brig Martyn Dunne, was reported as saying the security situation was "medium", with angry local people identifying returned militiamen.
Indonesian soldiers and local pro-Jakarta militiamen killed dozens of people and razed the nearby town of Suai after East Timor voted for independence on August 30th.
Several deserters from the Indonesian Army (TNI) and militiamen are also believed to have crossed into East Timor on a foraging mission, but left before New Zealand troops arrived.
Maj Gen Peter Cosgrove, the Australian head of Interfet, warned the Indonesians that such incidents would not be tolerated.
Gen Cosgrove also accused the East Timor independence leader Mr Xanana Gusmao of breaching policies set under the United Nations mandate by turning up at a UN compound in Dili yesterday with 20 guerrillas from his Falintil resistance movement armed with automatic weapons.
He did not take action however, according to reports from the East Timor capital, which quoted him as saying only that it was "an item of some note and from my point of view, of considerable regret". Falintil guerrillas may go anywhere unarmed, but must confine themselves to set cantonment areas if they have weapons. Mr Gusmao's explanation was that there had been a communication breakdown but the issues were clearly a potential cause of friction.
As leader of the National Council for the Timorese Resistance (CNRT), Mr Gusmao met Mr Sergio Vieira de Mello, the new head of the UN Transitional Administration in East Timor to express the CNRT's concerns that they were being ignored by the international community regarding the reconstruction of the country and its political future.
They also discussed the return of refugees in the light of yesterday's statement by Indonesia.
"By March 2000 at the latest, any East Timorese refugees in Indonesia must have made up their mind whether they want to go back to East Timor or become Indonesian citizens," Indonesia's Co-ordinating Minister for Welfare was quoted as saying.
However, armed militias still control camps in West Timor, where many displaced people are living.
Over 200,000 refugees were expelled or fled from East Timor in September when militias went on the rampage.
The UN refugee agency warned it would suspend the return of refugees if militia intervention continued. This follows an attack by 30 militiamen on a convoy of refugees in a truck in Atambua, 40 km from the border with East Timor.
"They beat up two refugees including a pregnant woman," UN Human Rights Commissioner for Refugees official, Ms Ariane Quentier, said in Dili yesterday. "The police were standing there virtually doing nothing."