Australia is scaling back its peacekeeping duties in East Timor as the fledgling nation prepares to mark the second anniversary of independence from Indonesia. But there are still concerns about looming threats to East Timor's long-term security.

The world's newest nation is preparing to take responsibility for its own security. The United Nations has trained East Timor's police and military but tough challenges lie ahead. There are reports that armed militias continue to cross the border from Indonesian-controlled West Timor.

Australian forces have wound back their patrols in the rugged border region. From now on the East Timorese will take over. The plan is to demilitarize the frontier. Soon, only about 100 Australian troops will remain in the country, down from 440 now, and well off the peak of 5,000 several years ago.

Australian army Corporal Scott Stone believes that many villagers are frightened as most of the peacekeepers prepare to leave. "A lot of the women are scared that the militia will come back, for rape and everything," he says. "I have concerns that when we leave, we'll be called back in a year or so, if the militia come back into the area, and we have to come back to Timor."

The remaining Australian contingent will be part of a new U.N. mission to help East Timor rebuild its civil infrastructure. The foreign advisers will also provide specialized support for East Timor's armed forces.

The peacekeepers came into the tiny country in 1999, after militias loyal to Jakarta devastated East Timor in the weeks surrounding a vote on independence from Indonesia. The United Nations then administered East Timor and helped set up a new government, before it became fully independent two years ago.

After four hundred years of Portuguese colonial rule and more than 20 years of Indonesian occupation, East Timor is about to take its first real independent steps by taking responsibility for security.

East Timor's Foreign Minister Jose Ramos Horta says he understands there will be nervousness about the country's ability to defend itself. He believes, however, the once-feared militias are no longer dangerous. "Militia threat has receded significantly, but I also have to say that peace is still fragile," he says.

These are difficult times in East Timor. The country remains the poorest in Asia. Two out of every five people live on less than a dollar a day, and the country relies on international aid for much of its needs.