DILI, East Timor -- Foreign peacekeepers handcuffed machete-wielding arsonists yesterday in a show of force aimed at quelling violence in East Timor's capital.
Mobs continued burning houses and anti government protesters called for the prime minister's resignation as heavily armed Australian troops patrolled the city on foot, in armored vehicles, and by helicopter.
Sporadic clashes that erupted last week between the army and dismissed soldiers in the seaside city of Dili have escalated into gang attacks, looting, and burning by ordinary people frustrated by poverty and unemployment.
At least 27 people have been killed and more than 100 wounded.
President Xanana Gusmao and political leaders held urgent meetings to find a way out of the country's worst crisis since its bloody break from Indonesia seven years ago.
Gusmao -- beloved as a hero of East Timor's independence -- urged protesters rallying outside his palace to be patient.
``Stop fighting . . . calm down," Gusmao told the crowd. ``Don't take up swords. Don't burn houses. Stop dividing the nation."
The crowd chanted ``Viva Gusmao! Viva Gusmao!"
Many demonstrators want Gusmao to dissolve parliament and Prime Minister Mari Alkatiri to step down. Alkatiri has been blamed for failing to stop the unrest, which was triggered by the March firing of 600 disgruntled soldiers from the 1,400-member army.
After staging deadly riots last month, the fired troops fled the seaside capital, setting up positions in the surrounding hills and threatening guerrilla war if they were not reinstated.
``The reality is that the government doesn't have the power to stop the violence," said protester Nino Perera, 30, an economics lecturer at Dili University.
One leader of the renegade forces, Major Agosto De Araujo, said the ousted troops had sent a message to Gusmao offering to join peace talks.
``We are ready to be called back to the negotiating table at any time," De Araujo said in a phone interview.
Arson continued yesterday , though there was less chaos than over the weekend, when gangs armed with machetes, clubs, and spears rampaged through the city.
Residents took advantage of the lull in violence to stream out of Dili, a city of around 250,000, into makeshift camps. Over a fifth of the entire population, or more than 50,000 people, already has left, the United Nations estimates.
As spectators looked on, Australian forces briefly detained youths caught lighting fires. The foreigners lack arrest powers and the suspects were soon freed.