Sydney - East Timor's most wanted man was in custody Saturday, sparking optimism among the troubled country's 1 million population that a two-year insurgency by rebel soldiers is coming to a close.

Gastao Salsinha gave himself up on Friday, and his surrender is expected to spark further defections from the dwindling ranks of soldiers who mutinied in January 2006.

Salsinha was the right-hand-man of Alfredo Reinado, who was shot dead February 11 in an attempted coup.

The attack left President Jose Ramos Horta with gunshot wounds that required him to spend two months in an Australian hospital. Prime Minister Xanana Gusmao was also targeted but escaped unscathed.

Ramos Horta returned to Dili last week and had urged Salsinha and other rebels to surrender.

"I don't want Gastao Salsinha to die. I don't want his wife to become a widow. I don't want his mother and father to be upset by his death," Ramos Horta said.

Ramos Horta, who led the diplomatic campaign that culminated in the half-island winning its freedom from Indonesia in 2002, took over as interim prime minister a year ago after Mari Alkatiri resigned in the wake of the army mutiny.

Ramos Horta was elected president last year, taking over from Gusmao, who was in turn elected prime minister.

Salsinha, who is in the personal custody of Armed Forces chief Tuar Matan Ruak, is unlikely to face charges despite allegedly leading the attack on Gusmao.

Those accused of fomenting the violence that has left dozens dead and driven tens of thousands into makeshift camps in Dili are routinely granted amnesties.

Reinado, who was implicated in a gun battle that left six police officers dead, had been at large after escaping from prison last year.

Despite the charges against him, Reinado and his rebels had the president's express permission to carry arms and travel free from the risk of arrest.

In a speech to parliament last week, Ramos Horta said that next month's Independence Day would see around 80 prisoners given an official pardon.

Among them would be former interior minister Rogerio Lobato, who was allowed to fly out of Dili nine months ago after serving just five months of a seven-year jail sentence for manslaughter and for recruiting and arming a private militia.

He was allowed to fly to Malaysia under the pretext of seeking medical treatment, but has not returned.

Friends and relatives who left with him have not returned either. (dpa)