The Indonesian President, Mr B.J. Habibie, said yesterday he wanted the issue of East Timor resolved by the start of next year.
His comments come a day after he allowed the East Timorese rebel leader, Mr Xanana Gusmao, to move from prison to house arrest. Most expect Mr Gusmao to lead the territory if it does eventually become independent.
"From January 1st, 2000, we don't want to be burdened with the East Timor problem," Mr Habibie said in a speech to the Indonesian Chamber of Commerce. "As a friend, we will let them decide by themselves."
Mr Habibie last month abruptly reversed his country's long-held stand on East Timor, offering its 800,000 people independence. And on Wednesday he bowed to mounting international pressure and moved Mr Gusmao, who was captured in 1992, to house arrest.
Most East Timorese would like to break from 23 years of Indonesian rule, which has been marked by a level of brutality that has earned Jakarta international notoriety.
That, they say, is a reputation Mr Habibie feels Indonesia must shake off as he is forced to repeatedly go cap in hand to the international community to help the country deal with its worst turmoil in three decades.
Indonesia's annexation of the former Portuguese colony, which its troops invaded in 1975, has never been accepted by the United Nations.
Indonesia has said it would prefer East Timor to choose autonomy. Some question whether the territory would be able to make it alone, even if led by Mr Gusmao, given its politically divided population, which contains a minority of pro-Indonesian "loyalists" allegedly supported and armed secretly by Jakarta.
Commenting on Mr Habibie's statement, the East Timor resistance spokesman and Nobel Peace laureate, Mr Jose Ramos-Horta, yesterday called the President courageous, adding it was the first time he had ever praised an Indonesian leader.