Dili - The East Timor government on Monday began emptying the largest displacement camp left in the capital in the first step in helping 2,000 displaced people return home.

The government also launched a new dialogue team to help the displaced sort out their differences with their former neighbors in the strife-torn country, which became independent in 2002.

The Don Bosco Catholic School camp has been home to thousands of people since April 2006 when police failed to stop citywide riots, which left as many as 150,000 people homeless.

Families waited Monday next to packed piles of clothes, toys and United Nations-issued tents as scores of yellow dump trucks ferried people out of the camp.

Most seemed happy to go home.

Venancio Guterres said his home was looted in 2006 and he lost everything. He said the government promised him a few hundred dollars in compensation and that he's ready to get on with his life.

But not everyone was so accommodating.

About 50 young male residents of the camp gathered before Social Solidarity Minister Maria Alves as she tried to address camp residents. They demanded to have their problems sorted out with their former neighbours before they left the camp.

Some neighbourhoods are loath to welcome back the exiles. In some cases, families were attacked because they were illegally occupying land or buildings.

The government has so far closed 24 camps and still has about 30 to go in Dili. The Social Solidarity Ministry said most of the returns were peaceful, but 10 to 20 per cent of returned families had problems upon return.

"Dialogue can help resolve differences within communities, and it can be used to resolve differences between people when crimes occur," Alves said.

"To help people reintegrate into the communities, we're giving the victims money, but that doesn't resolve everything," she said.

To help with the refugees' reintegration, the government formed a 26-member dialogue team trained to mediate social conflicts. The ministry said it hopes to keep the team long after the refugees have gone home to prevent future problems.

East Timor is one of the poorest countries in Asia. Unemployment is around 60 per cent. With no money and little to do, tensions run high, and disagreements often end in violence as they did in 2006.

The military had then cashiered nearly 600 soldiers who had left their barracks without permission. In protest, some soldiers took up arms against the government, and some police sided with the soldiers, leading to months of unrest in the streets.

In February, rebel soldiers also carried out failed assassination attempts against the president and prime minister. (dpa)