After more than three days of rising political tensions in East Timor, President Xanana Gusmao has apparently withdrawn his threat to resign from his post.  Mr. Gusmao had said he would quit if the country's prime minister remained, but the United Nations and thousands of his supporters asked him to reconsider.

Thousands of demonstrators loyal to President Xanana Gusmao rallied in front of his office in the capital city of Dili on Friday, calling on their leader not to follow through with his ultimatum.

Mr. Gusmao had threatened to resign if Prime Minister Mari Alkatiri did not quit his post.

Mr. Alkatiri has been accused in connection with an outbreak of violence last month that killed at least 21 people and displaced more than 100,000 others.

Street fighting exploded after Mr. Alkatiri fired 600 military personnel. There have been allegations that he may have helped arm militia groups that took part in looting in Dili.

It is not yet clear if Mr. Alkatiri plans to resign, but Mr. Gusmao told demonstrators on Friday he will fulfill his obligations based on their demands.

Earlier in the day, the United Nations' top officials in the country, Sukehiro Hasegawa, asked Mr. Gusmao to remain in office.

"He told President Gusmao that his continued presence as president is indispensable for the maintenance of peace and stability in the country," said Robert Sullivan, a U.N. spokesman.

Many in the tiny country still are pushing for Mr. Alkatiri to resign.

East Timor human rights activist Joaquin Fonseca says it would help to diffuse tensions in the capital if Mr. Alkatiri left office.

"I think it will help to create an environment under which a durable political solution can be sought for the current situation,? said Fonseca. ?If he resigns from his position, it will allow a legal process to start which will help to clarify who did what, to whom, when and how, to clarify responsibilities with relation to recent events which led us into this political turbulence."

The newly formed country with just one million citizens has struggled with regional resentments and a feud between those who fought for independence from Indonesia, and those who remained in exile during the conflict, including Mr. Alkatiri.

A force of 2,500 Australian, Malaysian, and Portuguese peacekeepers is patrolling the streets of Dili to prevent another upsurge of fighting.