The Australian Broadcasting Corp reported from the Timorese capital, Dili, that officials were concerned with the riots and violence that broke out Sunday when Australian troops killed four supporters of army rebel leader Alfreido Reinado.
Gangs of stone-throwing youths descended on the Australian embassy and roamed the streets harassing people, the radio report said.
Timor-Leste President Xanana Gusmao vowed to use all legal means, including a state of emergency, to hunt down the rebel leader.
Meanwhile in Canberra, Australian Foreign Minister Alexander Downer authorized the voluntary departure of the families of embassy staff in Dili.
"The security situation is volatile and there is a high risk of violent civil unrest," Downer said. "There is an increasing likelihood that Australians could be specifically targeted."