Timor independence cabinet announced

Independence leader Xanana Gusmao (L) who has opted to stay out of the cabinet, congratulates new ministers

DILI, East Timor (CNN) -- The leader of East Timor's veteran resistance party has been appointed the de facto head of the territory's new government.

Mari Alkatiri, leader of the Fretilin party, which won the majority of votes in last month's election, will head East Timor's first all-Timorese cabinet and lead the territory toward full independence.

Fretilin, or the Revolutionary Front for an Independent East Timor, won 55 out of the 88 seats up for grabs in last month's landmark elections.

East Timor's acting foreign minister, Nobel Peace Prize laureate Jose Ramos-Horta retains his position in the new 20-member Council of Ministers.

"This is the first truly representative and democratic government in the history of East Timor," said Sergio Vieira de Mello, East Timor's U.N. administrator, announcing Alkatiri's appointment.

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Fretilin will have a total of nine positions in the new cabinet, with Alkatiri retaining his position of finance minister held in the previous Council of Ministers.

Oil deal

The Fretilin leader was a key figure in the negotiations with Australia over the oil and gas reserves that lie beneath the Timor Sea that are expected to earn East Timor some $180 million a year in royalties over the next two decades.

He has a strong pro-business reputation and says he plans to offer numerous legal guarantees and incentives to attract overseas investment into East Timor.

The second largest party, the Democrats, will have two representatives on the new Council of Ministers, with nine other posts filled by independents and experts.

Fretilin was formed in 1974 and led political pressure for independence throughout Indonesian rule

The appointments are the latest step in preparing East Timor for full independence expected sometime around the middle of 2002.

The territory has been under United Nations administration since 1999 when East Timorese voted overwhelmingly to cut ties with Indonesia, ending 24 years of often brutal rule by Jakarta.

The territory's new assembly, sworn in earlier this month, is expected to write a constitution for the emerging independent nation and will most likely become East Timor's first parliament.

Announcing the formation of the new council, de Mello warned that East Timor was still only beginning its journey to independent nationhood and many challenges lay ahead.

"We continue to face the pains of building a new nation and its institutions from scratch with very limited means," he said.