Diplomatic sources told The Age that the Indonesian army, TNI, was suspected of being involved in the incident, which happened at 7pm local time.
Three shots were fired, apparently at random, into three empty offices on the third and fourth floors of the embassy, which was open for business and filled with staff at the time. Sources said one bullet was found embedded in the wall of the embassy.
Federal Government officials are deeply concerned about the incident. They say it emphasises the rising level of animosity towards Australia as more Australian-led troops make their way into East Timor.
Hundreds of Australian troops were greeted as liberators as they poured into Dili yesterday, but the head of the multinational peacekeepers warned that it was too early to say if security elsewhere in East Timor was “anything approaching benign”.
By late last night about 2800 foreign troops had landed by ship and on shuttles by Hercules transport aircraft, with their numbers expected to reach 3500 by Friday.
When 500 Australian troops came ashore from the high-speed catamaran HMAS Jervis Bay, they were greeted with cheers, applause and dances of welcome.
As a steady trickle of refugees started returning to the devastated city, the Australian head of the International Force in East Timor (InterFET), Major-General Peter Cosgrove, warned that his troops would not tolerate violence between rival groups.
General Cosgrove said he was worried that “bad blood” between pro-independence supporters returning from mountain hideouts and pro-Indonesian militia could lead to bloodshed.
“We want to ensure that both factions are careful to avoid where that bad blood will lead,” General Cosgrove said. “If we interpose we will stop clashes between groups that have become violent.”
Sources said the shooting attack on the Jakarta embassy came as political protesters outside the building – who are being paid $10 an hour or up to $40 a day – were rallying against Australia’s leadership of InterFET.
“We will not rule out the possibility that TNI is involved in this,” an Australian official said.
Elsewhere, protesters forced their way into the grounds of the Australian consulate in Medan, on the Indonesia island of Sumatra, burning the Australian flag and raising the Indonesian standard in its place.
In other developments, Federal Parliament yesterday devoted the whole of its proceedings to debate on the Timor crisis, with the Prime Minister, Mr John Howard, saying coalition and Labor administrations had for 25 years “reluctantly acquiesced in Indonesia’s policy towards East Timor”.
In Jakarta, President B.J.Habibie condemned Australian “interference” in East Timor as he appealed to the Indonesian Parliament to accept East Timor’s vote for independence.
In Dili, hundreds of independence supporters started returning after hiding for weeks in the mountains.
But many of the pro-Indonesian militia responsible for a reign of terror, including the suspected killing of thousands of people, are still roaming the streets.
Since InterFET troops started arriving in Dili on Monday they have quickly disarmed a small number of militiamen found with weapons.
Australian troops today interrogated eight men and confiscated about the same number of weapons.
One of the men tried to point a pistol at an Australian soldier but was quickly disarmed. The men will be handed over to Indonesian police who under a United Nations-brokered agreement are supposed to be responsible for security in the territory.
General Cosgrove said: “It is too early for us to assert that the security situation overall is anything approaching benign. We don’t at the moment have the knowledge of the wider province.
“We need to receive information from all sources as to what is happening out there and eventually start to establish a presence in those areas so as to underwrite peaceful conditions.”
General Cosgrove said the population of Dili was growing. “What was virtually a ghost town when I stepped through here on my reconnaissance the other day is starting to come alive,” he said.
“I will be happier when I see people from both factions are capable of being here without violence.”
Multinational troops today will land in eastern Baccau, where militia two weeks ago attacked a United Nations compound.
The Australian-led force will reoccupy areas along border with West Timor which militia groups have sworn to defend to the death.
A Defence Force spokesman, Colonel Duncan Lewis, said in Canberra that the international force was conscious of warnings by militia groups claiming control of land along the border.
“The United Nations mandate is very clear. It incorporates the entire area in the territory of East Timor and the force will exercise its authority over that entire area,” he said. — with BRENDAN NICHOLSON
Lindsay Murdoch is a three-time winner of the Walkley Award, Australia’s top award for journalistic excellence. Lindsay is a former correspondent based in Singapore, Jakarta and Darwin. In 1999 he covered the tumultuous events in East Timor, and in 2003 he covered the Iraq war while embedded with US Marines.
Paul Daley, a journalist of more than two decadesâ€™ experience, has covered the national debate since he moved to Canberra in 1993. He has been a political writer, a defence and foreign affairs correspondent and a foreign correspondent for Fairfax newspapers, and a national affairs editor for The Bulletin. He is the recipient of the Walkley Award for Investigative Journalism and the Paul Lyneham Award for Excellence in Press Gallery Journalism. He is the author of Beersheeba â€“ A journey through Australiaâ€™s forgotten war.