Prime Minister Xanana Gusmao escaped injury in another attack also on Monday morning, officials said.

Australia pledged to send more troops to Asia's youngest nation after the apparently coordinated attack on East Timor's two most famous independence figures.

Residents in Dili reported the capital appeared calm and Gusmao said Ramos-Horta was in stable condition after the attack in which a key rebel leader, Alfredo Reinado, was killed.

The president, who shared the 1996 Nobel Peace Prize with compatriot Bishop Carlos Belo for their nonviolent struggle for East Timor's independence from Indonesian occupation, was operated on by an Australian military medical team in Dili before being flow to Darwin in northern Australia for treatment.

"This is a serious attempt on a democratic state," Gusmao told a news conference. He later said at government palace that he had asked the acting president, deputy speaker of parliament Vicente Guterres, to impose night curfew in the capital.

An Australian medical official said Ramos-Horta, who was flown to Darwin on life support and in an induced coma, was stable but would undergo further surgery for two bullet wounds.

"He has wounds to the abdomen and lower chest. They are very serious wounds, particularly the chest injury is extremely serious," Dr Len Notaras, general manager of Royal Darwin Hospital, told Reuters.

"He has damaged blood vessels in the chest, they were repaired in Timor, and will be further repaired and cleaned up," he said adding that right lung also required extensive surgery.

"The next 24 to 48 hours will tell us about his progress. We are optimistic that the good surgical skills here...will mean he will have a good chance of recovery," Notaras said.

The former Portuguese colony of almost 1 million people gained independence in 2002 in a U.N. sponsored referendum after more than two decades of brutal Indonesian occupation.

But it has been unable to achieve stability.

Tensions rose this month after rebels loyal to rebel leader Reinado, who was blamed for Monday's attacks, fired on Australian troops patrolling near Dili.

"Prime Minister Xanana is going to have to work very hard to ensure the government retains its cohesion. It's a crisis now," said Damien Kingsbury, associate professor at Australia's Deakin University.

COORDINATED ATTACKS

Australian Prime Minister Kevin Rudd said he was "deeply shocked" by what appeared to be "coordinated attacks aimed at assassinating the democratically-elected leadership".

Rudd said he would visit East Timor later in the week to inspect security after a request from Gusmao.

Australia would send around 200 quick reaction troops immediately to the fledgling nation, along with 50 to 70 police.

New Zealand, which has more than 200 soldiers and police in East Timor, was putting additional troops on standby, New Zealand Foreign Minister Phil Goff said.

International security forces in East Timor, led by around 800 Australian soldiers, had secured key buildings in Dili and increased patrols in the capital and across the country.

East Timor has been struggling to get back on its feet after the army tore apart along regional lines in 2006.

The factional bloodshed two years ago killed 37 people and drove 150,000 from their homes, with foreign troops needed to restore order between warring neighbourhoods.

Reinado had led a revolt against the government and was charged with murder during the 2006 factional violence.

A Reuters reporter saw the bodies of the two dead attackers and identified one of them as Reinado.

An East Timor soldier was also seriously wounded, a military spokesman said.

The military said attackers in two cars were involved in the early morning raid on the president's isolated home, while a motorcade with Gusmao's car was targetted, officials said.

"No one was wounded but Gusmao's car was damaged by bullets," said the official, adding that Gusmao's family had been taken to a military compound for protection.

Security analyst Alan Dupont, from Sydney think-tank the Lowy Institute, said the shooting would "destabilise East Timor further at a time when they looked to be recovering from the problems of the last 12-18 months."

The predominantly Roman Catholic country, slightly smaller than Hawaii, is one of Asia's poorest nations, although has potentially lucrative oil and gas reserves.