East Timor could now manage its own problems and Australian troops should leave, Prime Minister Xanana Gusmao says.
Australia has 400 troops in the tiny island nation, along with 75 New Zealand soldiers, as part of the Australian-led International Stabilisation Force.
The force was expected to withdraw after the 2012 national election but Timorese media reports say Mr Gusmao favours an earlier withdrawal, Fairfax newspaper say.
Government spokesman Agio Pereira told Fairfax there had been a "total shift in the way our people perceive security threats".
"Nowadays when the President (Jose Ramos Horta) and Prime Minister go to the districts, beyond the capital (Dili), the demands of the population are about water, roads and bridges and not at all about policing and the army."
An Australian Defence Force spokesman said Australian troops were there at East Timorese government's invitation and that security in East Timor had been "calm and stable" for the past two years.
The troops have been training and monitoring East Timor's armed forces since unrest in 2006.
It is believed that official talks to discuss a withdrawal date have yet to be held.
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