The Indonesian government is preparing long-term housing just outside the border of East Timor for thousands of refugees from the chaos there--and for the military-backed militias and their supporters who have violently opposed independence for the territory.

Such a permanent encampment in the western part of Timor island, where about 60,000 refugees are now guarded by the militias, would allow those forces to continue their resistance to establishment of a new nation in East Timor.

Damiri, a top Indonesian army officer, said today that the militias will be controlled. "We will not let them bring [violence] to Kupang," he said. But privately, international observers say they fear the new housing would provide the militias with a base for guerrilla warfare in East Timor--a reversal of roles with pro-independence guerrillas who fought for 24 years to achieve last month's vote for independence from Jakarta. In the Aug. 30 referendum, nearly four-fifths of eligible East Timorese voted for independence and against remaining within Indonesia as an autonomous territory.

"This will be the perfect place to put the militias to try to get back some of the territory of East Timor," said an aid worker who asked not to be identified.

At least one-fourth of East Timor's 800,000 people are thought to be refugees. About 100,000 of them fled East Timor or were brought to western Timor, where they remain in camps that are largely under militia control. The government has portrayed the refugees here as mostly opponents of independence, but the referendum result belies that claim. It is unclear how many pro-independence refugees are being held by fear or force under militia guard.

Few predict that the militias, who were recruited and trained by the Indonesian military, will lay down their arms permanently, or even step aside quietly for the East Timor U.N. peacekeeping force that is now being readied at the invitation of Indonesia.

"The cause of the problems was UNAMET," the U.N. Mission to East Timor, which organized the referendum, said Abilio de Araujo, a former municipal official in Dili, the East Timorese capital, who is now here in western Timor. "The peacekeeping force are white people from the U.N., like them. So I'm afraid they will be attacked by the militias."

This animosity toward "white people," the general term here for all foreigners, has been whipped up by the militias. They have focused blame for their lopsided loss in the referendum on U.N. election observers and extended that blame to all foreigners.

The strategy has been effective with refugees in western Timor, who are either genuinely hostile toward foreigners or fearful of retribution for talking to them. If the same currents exist in East Timor, it could result in a hostile reception for the peacekeepers.

Damiri said he came to Kupang in part to reduce the influence of the militiamen here, although similar promises by the military in East Timor proved empty. Roadblocks appeared today on some of Kupang's streets, and Damiri said firearms will be confiscated from the militiamen and handed over to local police. "If there's problems from the militia, we will handle it," Damiri said.

But there has been no visible move to curb even tighter controls enforced by militia groups at the western Timor border town of Atambua, where militiamen oversee most of the refugees who fled East Timor. On the contrary, the government seems ready to install a permanent presence of anti-independence forces there.

Indonesian officials confirmed that they are planning to build housing at Atambua for permanent resettlement of those refugees who want to stay. "It's a huge project," said one international relief worker, who asked not to be named.

"Refugees who want to stay permanently will be allowed to stay," said the deputy governor of western Timor, J. Pake Pani. He said the government is building concrete houses and semi-permanent barracks. Because of overcrowding, some people will be encouraged to move to other sites, but Atambua will remain a major settlement area for the refugees, he said.

Special correspondent Ningrum Widyastuty contributed to this report.

CAPTION: Refugees, seeking safety from the violence in East Timor, carry their belongings to an Indonesian plane for the trip to a camp in Kupang in western Timor.