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East Timorese Prime Minister Mari Alkatiri has said the violence engulfing the capital, Dili, is part of a coup plot to unseat him.

As ethnic fighting raged across Dili Saturday, the prime minister of East Timor, Mari Alkatiri, told reporters that a coup attempt was under way.

"What is in motion is an attempt to stage a coup d'etat," he said.

Moments before the prime minister spoke, Australian peacekeepers disarmed dozens of youths with machetes, who were threatening to storm the hotel where the press conference was being held.

Although Mr. Alkatiri did not say who he believed was behind the alleged coup plot, he alluded to the widely rumored split between himself and the popular president and independence leader, Xanana Gusmao.

"I am confident that the President of the Republic will not cease to respect the constitution of the Democratic Republic of Timor-Leste, which he swore to comply with," he added.

Frightened East Timorese run past a burning car in Villa Verde neighborhood of Dili, May 27, 2006 Fighting raged across the capital Saturday, as foreign peacekeepers struggled to control the situation and failed.

The violence was triggered last month when 600 dismissed soldiers rioted, complaining of discrimination.

Mr. Alkatiri claims Dili's descent into anarchy is no longer a result of clashes between the armed forces and rebel soldiers. He says it is now caused by armed gangs taking advantage of the situation, possibly to settle old scores.

"It is, rather, violence stemming from the planned and opportunistic action of gangs, who have been looting and burning houses and goods, and threatening our martyrized people," he explained.

An Australian soldier takes up a defensive position along Dili's main street Friday, May 26, 2006 in DiliThe gangs have been rampaging through Dili, neighborhood by neighborhood, some torching houses of people they claim were loyal to the Indonesian military before independence.

Tiny East Timor is one of Asia's poorest countries, with a population of just one million.  Nearly half the work force is unemployed.

The conflict has forced the government to appeal for international help, and hundreds of Australian troops have already arrived, along with a contingent from Malaysia.  New Zealand and Portugal are also sending peacekeepers.