East Timor has officially come into existence as the world's newest nation at a ceremony in the capital, Dili. As a sign of full independence, the East Timorese flag was raised while the President Xanana Gusmao was sworn in. Mr Gusmao thanked the international community for its support in ending Indonesian rule.

Just before midnight, the United Nations Secretary General Kofi Annan handed over power from the UN-led administration which has controlled the former Portuguese colony for the past three years. He paid tribute to the East Timorese people for the courage and determination they had shown in order to win their freedom.