East Timor's Foreign Minister Jose Ramos Horta said the situation in the capital Dili today was one of uneasy calm.
The army and disgruntled ex-soldiers exchanged fire in gun battles yesterday for a second day running, but Mr Horta said order was holding this morning.
However, he said foreign troops - including a possible deployment from New Zealand - were still required. Australia said its forces could begin arriving there this afternoon.
There has been trouble in the country since five people were killed late last month during a protest by 600 soldiers sacked for desertion. A sixth person was killed on Tuesday.
The conflict has been factionalised and Australia and Portugal are sending troops to help retain peace, the first of which could arrive later today. Prime Minister Helen Clark said New Zealand was also considering a request for help.
Mr Horta told National Radio he had visited shelters and been out in the capital and the situation was stable today.
"But this calm and this quiet is very precarious," he said. "There are still tens of thousands of people sheltering in different parts of the city or outside of the city.
"There is palpable fear amongst many thousands of people that violence can break out again..."
Mr Horta was open to meet New Zealand representatives and discuss terms for troops going to East Timor.
Australia and New Zealand had asked for written requests for help. These were sent last night and were signed by President Xanana Gusmao and other political leaders.
Two Australian navy ships are already on their way to the troubled state and Australia's Vice Chief of Defence Force is set to visit the capital, Dili, to finalise details of the country's navy deployment.
"Assuming they are able to negotiate all of that satisfactorily then we will be able to move straight away," Australian Foreign Minister Alexander Downer told Australian television.
"In terms of the bulk of our troops arriving there they will probably be able to get there in around 48 hours from the moment we authorise them to leave, but it might be possible to get some small numbers there in advance."
Australia has pre-deployed a battalion of between 1000 and 1300 troops. Portugal has said it will send 120 military police to help in the security effort.
Malaysia was looking at sending 500 personnel - 250 as a special police force and the other half military.
Mr Horta had talked to rebel soldiers leaders last night who "seemed to indicate willingness to engage in dialogue".
Though he hoped talks would take place this weekend, troops from Australia, New Zealand, Portugal and possibly Malaysia were still necessary, he said.
- NZPA, REUTERS