There has been an explosion at an army base in East Timor shared by Australian and New Zealand peacekeepers. Earlier this week, East Timorese rebels fired at Australian troops southwest of the capital, Dili. The rebels are led by fugitive East Timor army Major Alfredo Reinado. From Sydney, Phil Mercer reports.

The explosion happened at Camp Phoenix, which houses parts of the International Stabilization Force, in the center of Dili.  Both Australian and New Zealand troops are based there.

No injuries have been reported and an investigation by United Nations police is under way to try to determine the cause of the blast.

Authorities have not said whether the incident may be linked to an incident in Ermera district on Wednesday. Shots were fired at an Australian patrol, which did not return fire and left the area.

Australian and New Zealand forces, along with others from Portugal and Malaysia, were sent to East Timor to restore order after a wave of civil unrest in 2006.

The violence forced tens of thousands of East Timorese from their homes in the capital, Dili, and surrounding regions.  Relief agencies are still struggling to cope.

Aid worker Luis Viera says life is difficult for those forced to live in relief camps set up to house displaced people.

"People have fled to places that weren't built to support such large populations, so you have to deal with space constraints, shelter constraints, the issues relating to water sanitation, not enough toilets, etcetera," he said. "So, yeah, the situation is of course very, very difficult."

East Timor's Prime Minister Xanana Gusmao (L) speaks to a group of petitioners in Dili who left East Timor's armed forces in 2006 under the leadership of Major Alfredo Reinado, 07 Feb 2008

Threats of more instability have prevented many from leaving the squalid camps.

Rebels led by Alfredo Reinado, a renegade former military police chief, are thought to have been responsible for Wednesday's shooting incident. Reinado has been on the run since he was arrested on charges of illegal weapons distribution, desertion and attempted murder following the violence in 2006.  He has led a revolt against East Timor's government and authorities there blame him for much of the trouble two years ago.

East Timor, a former Portuguese colony, voted to break away from Indonesia in a violence-marred vote in 1999.

It became independent in 2002 after a period of U.N. administration, but remains one of the world's poorest countries.