The home of Timorese Prime Minister Xanana Gusmao was also shot at early today, a witness said, suggesting this was a half-baked coup attempt. Australian Prime Minister Kevin Rudd said this afternoon that Australia will reinforce its troops in East Timor as a result of the attacks.

East Timor's Foreign Minister Zacarias da Costa said Mr Ramos-Horta was stable after emergency surgery to "locate bullets". "One had hit him in the back and passed through to the stomach,'' he said. Royal Darwin Hospital is on standby to receive Mr Ramos-Horta when he is flown out of Dili.

Mr Ramos-Horta's adviser, James Dunn, told ABC Radio: "My understanding is that he was shot twice in the stomach by Reinado's men, and then of course Horta's army of Timorese military guards returned the fire and according to some reports Reinado was killed.'' The attack on Mr Ramos-Horta was followed at 7.45am by gunfire against Mr Gusmao's home, neighbour Leandro Isa'ac said by telephone from Dili.

Mr Gusmao and his Australian wife Kirsty Sword-Gusmao live at Balibar, in foothills south of Dili. "I heard the gunfire and alerted army commander Taur Matan Ruak, who also lives near here," Mr Isa'ac said. Mr Gusmao later told journalists the situation in East Timor was "under control'' after the assassinations attempts.



Shot in stomach "President Ramos-Horta was shot in the stomach and is undergoing surgery at the heliport," Agusto Junior, a presidential adviser, told reporters earlier.

East Timor's Deputy Prime Minister Jose Louis Guterres said: "He will survive, and this country will survive." He said two carloads of people went to the President's house at Areia Branca, two kilometres outside Dili about 6am and "assaulted him, but after rapid reaction by security, his attackers fled". Mr Ramos-Horta's next door neighbour, Luis Vieira, said he was woken at 6.50am (Timor time) by a 20-minute gun battle coming from the President's residence.

Senior UN officials held an emergency meeting at 8am, while UN police and the East Timorese army were said to be at the house soon after the shooting stopped. Rebel Reinado shot dead

Army spokesman Major Domingos da Camara said house guards had shot and killed Reinado, who was wanted on murder charges for a flare-up of violence in 2006. Australian officers with the International Stabilisation Force (ISF) said Mr Ramos-Horta's house in Dili had been cordoned off and troops had rushed to the residence. Australian non-government organisations in Dili have recommended that their staff remain at home today.

UN spokeswoman Isabelle Abric said via phone from Dili that UN police and the International Stabilisation Force were on high alert and were maintaining a presence on the capital's streets. "Our first concern is that the situation remains calm and for people not to panic ... it's too early to say anything about the future at this stage."

No evacuations were being considered, she said. "So far everything is calm and hopefully it will remain calm." Heard the gun battle

Ms Abric, who lives only 50 metres from Mr Ramos-Horta's house, said she heard the gun battle herself. "I've been in a lot of war zones but I did not calculate exactly [how many shots were fired or what calibre the weapons were]. I heard definitely two series of shots which didn't sound to be the same [calibre]."



Reinado had threatened to use force against the Government in November if it failed to concede to demands by a group of army deserters.

Reinado was indicted for his alleged role in several deadly shootings between the rebel army troops and police units in April and May 2006. The fighting spilled over into mayhem that left 37 people dead and drove 155,000 others from their homes. Calm was restored by foreign troops and peaceful elections were held in which Mr Ramos-Horta was elected President, but low-level violence had continued.

East Timor, a former Portuguese colony, gained independence in 2002 after more than two decades of brutal Indonesian occupation. Rampant poverty

Its new political leaders have vowed to tackle rampant poverty and restore damaged relations between the country's police and army. Reinado was involved in an incident last week when his rebel group fired up to eight warning shots at Australian ISF troops. The ISF soldiers did not return fire and no casualties were reported.

Today's attack follows growing tension in Dili linked to Reinado and his followers. Explosion

Following his confrontation last Wednesday with Australian soldiers, an explosion last Thursday rocked the military base at Camp Phoenix, in central Dili. There were no injuries. Camp Phoenix houses elements of the ISF, which includes Australian and New Zealand defence personnel. Security forces have previously failed to apprehend Reinado, who in January refused to attend a scheduled court hearing tomorrow to face murder and other charges.

Reinado's lawyer said the rebel leader would not submit to the judicial process until the Government met several demands, including that his case be heard by a military court. The court issued an arrest warrant for Reinado following his escape from prison, but last year Ramos-Horta called off the warrant following a bungled attempt by the Australian military to arrest the rebel in Same, 50 kilometres south of Dili.

Died in raid Five of Reinado's followers died in the mountain raid. Reinado, who escaped from prison last year and led a group of 600 rebel soldiers, was a key figure in the 2006 violence that plunged the country into violence and was wanted on eight counts of murder.

Mr Ramos Horta called off the military search for Reinado last June so the sides could engage in talks. Last August Mr Ramos-Horta met Reinado to seek an end to the unrest.

"At the meeting, both sides expressed support for a dialogue process with the aim of settling their differences peacefully and ending the armed confrontation," Swiss-based mediators, the Centre for Humanitarian Dialogue in Geneva, said in a statement at the time. It called the meeting "a positive move towards the start of a genuine dialogue process".



Mr Ramos-Horta shared the 1996 Nobel Peace Prize with Bishop Carlos Belo for their resistance to Indonesian rule. - with Edmund Tadros, Dylan Welch and agencies