Tens of thousands of residents also fled Dili or sought refuge in churches, embassies and at the airport, leaving much of the city deserted.
Smoke billowed from several areas where attacks were taking place Sunday. Australian troops rumbled toward the sound of gunfire in tanks and armored personnel carriers, but seemed to only briefly scatter combatants.
"It's a trickier operation than some people think," said Australian Prime Minister John Howard. "Nobody should assume that it's just a simple walk-in-the-park military operation."
The weeklong violence has killed at least 27 people, probably more, raising concerns that one of the world's youngest nations is plunging into a civil war, seven years after its traumatic break for independence from Indonesia.
The unrest was triggered by the March firing of 600 disgruntled soldiers -- nearly half the 1,400-member army -- and is the most serious crisis East Timor has faced. After staging deadly riots last month, the sacked troops fled the seaside capital, setting up positions in the surrounding hills and threatening guerrilla war if they were not reinstated.
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