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| Gusmao to be East Timor's new PM | Gusmao to be East Timor's new PM |
| (30 minutes later) | |
| East Timor's President Jose Ramos-Horta has chosen his predecessor, independence hero Xanana Gusmao, to be the country's new prime minister. | |
| His decision comes after Mr Gusmao's new CNRT party and its main rival Fretilin failed to reach agreement on who should form a new government. | |
| Neither party won a majority in the June election. | Neither party won a majority in the June election. |
| The election had been seen as a fresh start for the young, impoverished nation. | |
| The country had been in political limbo since mid-2006, when then Fretilin Prime Minister Mari Alkatiri was forced to resign after violent feuding between rival army and police units spilled on to the streets, killing 37 people and forcing thousands to flee their homes. | |
| Deadlock | Deadlock |
| Fretilin, under Mr Alkatiri, won 21 seats in the parliamentary elections in June. | Fretilin, under Mr Alkatiri, won 21 seats in the parliamentary elections in June. |
| Mr Gusmao's new National Congress for the Reconstruction of East Timor (CNRT) party won only 18 seats, but had formed an alliance that would give it 37 seats in the 65-member legislature. | Mr Gusmao's new National Congress for the Reconstruction of East Timor (CNRT) party won only 18 seats, but had formed an alliance that would give it 37 seats in the 65-member legislature. |
| XANANA GUSMAO Former guerrilla leader who led East Timor to independenceSpent six years in Indonesian prison until 1999Made first post-independence presidentStepped down in early 2007 to run for more hands-on role of PM class="" href="/1/hi/special_report/1999/05/99/east_timor/342145.stm">Profile: Xanana Gusmao | |
| "I have taken the decision to invite the Alliance of the Parliament Majority to form the government," Mr Ramos-Horta told reporters, referring to Mr Gusmao's coalition. | "I have taken the decision to invite the Alliance of the Parliament Majority to form the government," Mr Ramos-Horta told reporters, referring to Mr Gusmao's coalition. |
| "The AMP has proposed that leader Xanana Gusmao become the prime minister. I have accepted it," he said. | "The AMP has proposed that leader Xanana Gusmao become the prime minister. I have accepted it," he said. |
| Fretilin and the CNRT had spent more than a month discussing, and failing to agree, on the formation of a new government. | |
| Fretilin had claimed it should form the government because it won most votes in the election, but it has been unable to find the coalition partners it needs to govern with a majority. | |
| Mr Ramos-Horta had urged the two parties to agree to a unity government, and had delayed exercising his constitutional right to settle the matter until Monday. | |
| A new parliament was sworn in last week. | |
| The BBC's Lucy Williamson in Jakarta says the president's decision risks a violent reaction from Fretilin supporters. | |
| But, our correspondent adds, Mr Ramos-Horta may have decided that allowing the country to stagnate under a minority government would be an even bigger risk to stability. | |
| The former Portuguese colony of East Timor has been hit by outbreaks of violence since it achieved independence in May 2002. | |
| The country broke away from 25 years of Indonesian rule in a 1999 referendum, and was placed under UN protection until 2002. |