Under the agreement signed yesterday, Indonesia's proposal for autonomy within the country for East Timor would be decided by 800,000 Timorese people in a vote to be supervised by the UN.

If the plan is rejected, Indonesia has promised to grant independence to East Timor.

The agreement along with two annexes was signed at UN headquarters by foreign ministers of Indonesia and Portugal, Ali Altas and Jaime Gama, while UN Secretary General Kofi Annan signed the basic document as a witness.

Annan, who played an active role in drafting the pact, expressed his "earnest hope" that it would open a new and more peaceful chapter in the history of the "troubled country."

The agreement comes more than 23 years after Indonesia invaded the former Portuguese colony, which witnessed recurring clashes between groupswho prefer remaining part of Indonesia and those seeking independence.

A 600-strong UN mission will oversee the vote, which is being called "consultation" as Indonesia objects to the use of the word "referendum".

The agreement calls for the UN chief to put for consideration by the East Timorese people the proposed constitutional framework providing for special autonomy within the unitary republic of Indonesia.

At a joint news conference, Annan confirmed the UN was moving to the next phase. "United Nations staff are already on their way to the region to begin preparing for the popular consultation. All of us are determined to ensure that it is free, fair and thorough."

The agreement provides for two possible outcomes.

In case the proposed framework for special autonomy is accepted, Portugal is obliged to initiate procedures to delete the issue of East Timor from the Security Council and General Assembly agendas.

However, if the framework is rejected, Indonesia would initiate constitutional steps toterminate links with East Timor.

Jakarta would then make arrangements for a peaceful and orderly transfer of the authority in East Timor to the UN and the Secretary General would initiate steps enabling East Timor to begin its transition towards independence.

However, the pro-independence groups and militias were disappointed by the agreement which would allow the Indonesian forces to be in charge of security.

They accused the security forces of siding with anti-independence groups and militias.

Aussie PM pats himself
Australian Prime Minister John Howard claimed credit on Thursday for initiating the successful deal between Portugal and Indonesia on East Timor.

``After all it was my letter to (Indonesian President) Dr Habibie in December of last year that was the catalyst for the change in policy by the Indonesian government,'' he said. ``There is no doubt in the world that the meeting I had with Dr Habibie, which involved a one-and-a-half hour, one-on-one personal discussion with nobodyelse present...received a lot of international focus.''

Howard met President B.J. Habibie in Bali late last month following a rampage by pro-Indonesian militia which left at least 21 pro-independence advocates and refugees dead in the East Timor capital of Dili. The Prime Minister welcomed the formal signing of the landmark deal at the United Nations which will enable East Timorese to vote for either autonomy or to move towards independence after 24 years of Indonesian rule.