Angelita Pires is alleged to have been with Alfredo Reinado hours before his rebel group attacked both PM Xanana Gusmao and President Jose Ramos-Horta.

Mr Gusmao escaped unhurt, but the president was critically wounded and is currently recovering in Australia.

Police are also hunting at least 17 people suspected of involvement.

Reinado himself was killed in the shootings.

Ms Pires, who has dual Australian and East Timorese citizenship, was arrested in the capital, Dili, on Sunday.

East Timor's Prosecutor-General Longuinhos Monteiro said she was suspected of "knowing something", as she gave accommodation to Mr Reinado the night before the attack.

"Pires knew that Alfredo Reinado was staying in her house," he said. "Why did she not tell authorities?"

No further details were given about the arrest, which is believed to be one of four detentions so far.

'No more dialogue'

Mr Monteiro said the authorities believed the rebel group had plotted to kidnap the two leaders, but their plan went wrong.

"When you fail at plan A, of course you have to apply plan B," Mr Monteiro told the Associated Press.

Interim president Fernando de Araujo said that there would be "no more dialogue" with the rebel forces following the attack.

Mr Ramos-Horta had been involved in negotiations with Mr Reinado's group before last Monday's shooting.

Mr de Araujo said that police and military forces had been told to arrest people "directly and indirectly" linked to the attacks.

He told a news conference in Dili that an arrest warrant had been issued for Gastao Salsinha, who claims to have taken over Reinado's role as rebel leader.

"Salsinha must hand over weapons to face justice," he said.

Meanwhile the head of the UN mission in East Timor warned that "hard action" would be taken against rebels if they did not turn themselves in to police.

"If they surrender, they will be treated with dignity according to the law,” said Atul Khare. "And of course if they do not surrender, police and other security forces, including the International Stabilisation Force, will take action."

Curfew

More than 200 people have so far been detained for breaking emergency laws imposed after the attacks, according to police.

But some people in the capital have complained that the curfew is unnecessary and is affecting their businesses.

"I think the government has dramatised the situation," said Joao Pinto, a shopkeeper.

"It's so calm in Dili and the country, but they have not pulled back the state of emergency."

Mr Ramos-Horta is in a serious but stable condition in Australia, where he was taken after the attack.

Doctors have said they are hopeful that the Nobel peace laureate, 58, will make a full recovery.

He remains on a ventilator, and is likely to undergo a fifth round of surgery on Tuesday.

(BBC)

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