Phnom Penh, Cambodia - Refugees on the Pacific island country of Nauru have expressed "high distress" following the signing of a controversial $35m resettlement deal between Australia and Cambodia on Friday afternoon after reports that seven teenagers - six boys and a 16-year-old girl - attempted suicide on the island upon hearing the news.

The signing of the agreement, which could see more than 1,000 refugees - mostly from the Middle East and South Asia - granted permanent residency in Cambodia, came after months of negotiations between Canberra and Phnom Penh.

According to Professor Suvendrini Perera of Curtin University's Asia-Pacific Institute, who has been in regular contact with the refugees at Nauru's detention centre, there were seven suicide attempts after the refugees received a video message from Australia's Minister of Immigration and Border Protection Scott Morrison saying that if they did not accept "voluntary" resettlement in Cambodia, they would stay on Nauru for another five years and never be resettled in Australia. The message sparked protests on the island Thursday night.

At the signing "ceremony" on Friday, Morrison raised a glass of champagne and toasted the agreement with Cambodia's Interior Minister Sar Kheng, a former Khmer Rouge leader.

Morrison would not answer questions at the signing, but ahead of his visit to Phnom Penh on Friday, he told ABC News that the deal would see Australia give $35m in "development assistance" over the next four years.

"Now this is on rice-milling projects, on land-mine-clearance projects and things of that nature, and electoral-reform issues. So these are good projects. They're projects that are very worthy," Morrison told the ABC.

Earlier on Friday, a small group of Cambodian protesters gathered outside the Australian embassy in Phnom Penh to oppose the agreement.

"The number and timing of refugees' resettlement will be determined by Cambodia," a statement released at the ceremony said, adding that the cost of the scheme would be borne by Australia. "A number of those found to be in genuine need of protection will now have the opportunity and support to re-establish their lives free from persecution."

Confusion and disarray

Speaking from the so-called "Fly Camp" on Nauru, where several families have been granted refugee status and temporary residency on the island, a refugee from Pakistan's Federally Administered Tribal Areas, who cannot be named for security reasons, said the community was in a state of confusion and dismay.

"We don't know what Scott Morrison is doing," the refugee said. "Sometimes he gives us [Temporary Protection Visas] and sometimes he deals us [to] Cambodia."

Australia maintains that resettlement in Cambodia will be voluntary, but the realities on the ground in Nauru may make this commitment unachievable.

Nauru, in the midst of a financial crisis, has begun cutting public services, including those for refugees, as it struggles to pay off $49m in debt to US investment fund Firebird. Westpac, the Australian-owned bank the island's government banks with, has frozen the government's accounts. Several of Westpac's directors serve as advisers to Australian Prime Minister Tony Abbott 's government.

On Thursday, Morrison tabled a bill in the Australian parliament that would reintroduce Temporary Protection Visas (TVP) and new temporary visas called Safe Haven Enterprise Visas. The bill would also remove many of the references to the Refugee Convention from the country's Migration Act, a move widely denounced by rights groups.

They are in a state of high distress. Not only the Australian, but the Cambodian government and people should feel very concerned about the state of some of these refugees. - Professor Suvendrini Perera, Curtin University

The signing of the accord proceeds months of secretive negotiations between the two parties. High-level bureaucrats have made visits to Cambodia on several occasions and Cambodia has expanded its new immigration department ahead of the arrival of the refugees.

In the past months, recent Australian embassy appointee Greg Kelly, who previously served as co-manager of the regional support office of international people smuggling forum the Bali Process, has reportedly been assessing possible locations where the refugees could be housed.

Speaking on Thursday, Kheng told reporters that the scheme would begin with a pilot phase in which only a small number of refugees would be resettled. Another senior ruling Cambodian People's Party official, Chheang Vun, on Thursday said Australia was "bored" of accepting refugees.

If the pilot is considered a success, Morrison said there would be "no cap" on the number of refugees arriving in Cambodia - a country ranked as second only to North Korea in East Asia in terms of public sector corruption last year and behind only Iran and Afghanistan in terms of susceptibility to money laundering.

Professor Perera, who has worked closely with the refugees on Nauru, said they were deeply troubled by the uncertain prospect of resettlement.

"They are in a state of high distress. Not only the Australian, but the Cambodian government and people should feel very concerned about the state of some of these refugees," she told Al Jazeera, adding that she had received unconfirmed reports that seven people had attempted suicide on Friday.

"With the Australian government's recent announcement that it was going to issue TPVs to refugees, many to the people on Manus [Island] and Nauru, [they] were hoping that this may be extended to them. They are now doubly devastated to learn that not only are they ineligible to be considered for TPVs, but that they are to be shipped out yet again … to a new place characterised by harsh conditions and without any clarity about their future."

'Fly Camp'

In August, the refugees in the "Fly Camp" told Perera of the "unlivable" conditions they were subjected to.

"We are living in a camp in the jungle. This is where they 'resettled' us. This is no place to live. If we are refugees why are we not living in [the] community? We have no neighbours here. Our 'neighbours', our 'relatives' are mosquitoes and flies and dogs," they said in a statement at the time.

Marc Isaacs, who has spent a considerable amount of time with the refugees, describes the camp's conditions as "purposefully underprepared" in his book, The Undesirables. He claims that the shoddy conditions played a part in Australia's "No Advantage" policy, which, along with the Abbott administration's "Sovereign Borders" policy, seeks to deter asylum seekers, who arrive on overcrowded boats in Australia's territorial waters, by processing them in Pacific island detention centres run by private security firms with a history of abuse.

David Manne, a lawyer with the Refugee and Immigration Legal Centre, said the deal "represents a fundamental abandonment of Australia's obligations to protect people fleeing persecution".

"Cambodia - one of the poorest countries in our region with one of the worst human rights records - is a completely unsuitable place to resettle refugees. It's a country that can barely meet the needs of its own population, let alone the basic needs of refugees," he added.

Denise Coughlan of the Jesuit Refugee Service said that living conditions for refugees who accept an offer to relocate to Cambodia would probably be an improvement, adding that the scheme should not include any form of long-term "institutionalised accommodation".

"You know, we are [the Australian governments'] animals. In the words of Scott Morrison, he wants to sell us - sometimes to one country, sometimes to another country. But no one is ready to [welcome] us," the Pakistani refugee on Nauru said. "In our country [the] Taliban can come kill us; they will cut my throat and I will die quickly. But Australia [is] killing us day by day. We don't know about Cambodia, but we need to [escape] this torture."