Roman Catholic Bishop Carlos Belo and self-exiled activist Jose Ramos Horta were handed their Nobel gold medals and diplomas in a ceremony in Oslo's City Hall before several hundred dignitaries, including King Harald of Norway.
Nobel Committee chairman Francis Sejersted, who presented the laureates with the $1.12 million prize, said they were awarded "for their long lasting efforts to achieve a just and peaceful solution to the 20-year-old conflict in East Timor."
The Nobel prizes in physics, chemistry, medicine, literature and economics were to be awarded later Tuesday at a ceremony in Stockholm.
Belo, 48, said the people of East Timor wanted peace and respect for human rights.
"It is high time that the guns of war are silenced in East Timor, once and forever. It is high time that tranquillity is returned to the lives of the people of my homeland. It is high time that there be authentic dialogue," he said in an acceptance speech interspersed with quotes from the Bible. "It is my fervent hope that the 1996 Nobel Prize for peace will advance these goals," Belo added.
Indonesia, which condemned the inclusion of resistance leader Ramos Horta in the prestigious prize when the Nobel Committee made its announcement in October, boycotted the ceremony, Nobel officials said.
But Portuguese Prime Minister Antonio Guterres, whose government supports East Timor's independence cause, was in the audience.
Indonesia annexed the former Portuguese colony in 1976 following an armed invasion the previous year. The United Nations continues to reject Indonesian claims to sovereignty and considers Portugal the administering power.
Ramos Horta, also 48, urged the international community, including the European Union, the United States and the Association of South East Asian Nations, or ASEAN, to help strive for an independent East Timor.
"To Indonesia and our other neighbors in the ASEAN we are offering a hand of friendship and appealing to them to help us bring peace and freedom to East Timor," he said.
Sejersted said East Timor, a 19,000-square-kilometer territory in the Timor Sea, had been called "the forgotten conflict."
"There have been so many other interests and regards to attend to, and East Timor is so small. Rarely has the cynicism of world politics been more clearly demonstrated," he said.
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