About 1,000 Australian peacekeepers are serving in the former Indonesian territory, which gained independence following a bloody 1999 U.N.-sponsored vote.
"We both agreed that whilst it would be undesirable to have a premature withdrawal, the main area of improvement would have to be in that of domestic policing," Howard told reporters in New York according to a transcript released Wednesday in Canberra.
"You can't forever use peacekeepers as domestic police and it's a misunderstanding of their role to think you should."
Two people were killed and 25 injured in December when a mob of up to 800 youths went on a rampage, besieging parliament and torching the home of Prime Minister Mari Alkatiri.
The mob also looted and burned several other buildings including an Australian-owned guest house and supermarket before finally being dispersed by U.N. peacekeepers and police.
The violence was the worse since East Timor became independent last May. A vote to break away from Indonesia and become independent in 1999 was followed by a bloody backlash in which about 1,000 people were killed.
Howard said Australia would consider expanding the role of the Australian Federal Police, who have helped the nation train its police.
"If we thought it was going to make a material difference we'd have a look at it," the prime minister said.
The United Nations, which ran the country between the referendum and independence, still has responsibility for the security and police forces.
- Reuters - Thomson Reuters Foundation
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