East Timor's beleaguered Prime Minister Mari Alkitiri has resigned after weeks of violence and turmoil in the tiny nation.
President Xanana Gusmao accepted the resignation of East Timor's Prime Minister Mari Alkatiri.
Earlier in the day, Mr. Alkatiri said he was willing to step down to avoid the resignation of the popular President Gusmao, who threatened to quit last week if the prime minister stayed in office.
"Recognizing that the people of Timor Leste deserve to live in peace and tranquility … I am ready to resign from my position of prime minister of the government so as to avoid the resignation of His Excellency, the president of the republic."
Jubilant crowds beat drums and honked car horns in the capital Dili to celebrate the news of Mr. Alkatiri's resignation. Daily protests had been held in the capital since last week demanding that he step down.
Many East Timorese blame Mr. Alkatiri for the violence that has hit the nation since March, when the prime minister fired 600 disgruntled soldiers who complained of discrimination.
Fighting within the military escalated into gang warfare, arson, and looting last month in Dili, leading to the deaths of at least 30 people and forcing nearly 150,000 to flee their homes.
The chaos only began to subside after 25,00 international peacekeeping troops, most from Australia, arrived last month to restore order at the government's request.
Mr. Alkatiri also faces allegations of forming a hit squad to kill his opponents, charges he denies. Australian Prime Minister John Howard says he hopes the nation can solve its problems soon because the peacekeepers cannot stay in East Timor forever.
"The best thing I can do is express the hope that the East Timorese resolve their own differences through their own democratic processes. Australia cannot maintain forces in East Timor indefinitely."
Australia led an earlier international peacekeeping force into East Timor in 1999 after the country's overwhelming vote for independence from Indonesian rule led to violence by pro-Jakarta militias.
East Timor, which became fully independent in 2002, was a Portuguese colony for four hundred years before Jakarta invaded in 1975.
The country, which has a population of about one-million people, is among the poorest in the world. Few people have jobs and thousands of unemployed youth in the country add to the political stress.