Gusmao sworn in as East Timor PM

Independence hero Xanana Gusmao was sworn in as East Timor's new prime minister on Wednesday.

The swearing in comes a day after Gusmao's appointment triggered violence by opposition loyalists in which at least six people were injured.

Gusmao, who used to be president of East Timor, was inaugurated at a ceremony at the state palace in the capital, Dili. His deputy and the country's new government ministers were to be sworn in later.

Authorities had been expecting violence after the announcement on Monday that President Jose Ramos-Horta would break a political logjam by handing the prime ministerial post to Gusmao, who led the country's armed resistance to Indonesian rule.

The unrest, which has mostly involved young men torching unoccupied buildings and throwing stones, threatens the fragile peace that took hold after the collapse of tiny, impoverished East Timor's government a year ago.

The former ruling party, Fretilin, won 21 seats in the 65-member Parliament in June elections, well short of a majority, but insisted it had the right to form the next government. Gusmao's party won 18, but formed a coalition that now has 37 seats.

Fretilin called the decision to appoint Gusmao illegal and vowed to have it overturned in court.

Gangs rampaged in the capital, Dili, but the worst violence was in Baucau 128 kilometres to the east, where buildings housing the offices of international aid groups and government agencies were set ablaze