The turning point for José Alexandre "Xanana" Gusmão came in December 1978.

Three years of napalm, shelling, and hunger had broken the back of the resistance fighters battling for independence from Indonesia. Split by infighting, an army that had numbered in the thousands was reduced to fewer than 100, its commanders and spirit nearly dead. An Indonesian cordon was tightening around the starving survivors in the mountains.

"They were convinced victory was impossible,'' says veteran Virgilio Simith, "and they worried about reprisals against civilians." Then Mr. Gusmão – a skinny, obscure resistance fighter who had won East Timor's 1974 poetry prize – took control. He led a few dozen survivors through Indonesia's lines and built the independence movement that ended with the UN-sponsored referendum in 1999.

In the coming years, he became a warrior so elusive that followers thought he could change shape; a peacemaker who reconciled warring independence factions; and a politician who managed the expectations of his people as deftly as he wrung reluctant support from the international community.

Now to Xanana, as he prefers to be called, falls the task of guiding East Timor to a peaceful and prosperous future. He was elected president in a landslide in April. He took power yesterday, as East Timor declared its nationhood, and the United Nation's transitional government, which has run East Timor since 1999, stood down.

Foreign donors are expected to fully support East Timor, and some 5,000 peacekeepers will stay for up to two years.

Thousands of East Timorese gathered last night outside the capital of Dili for the celebration. Delegates from 80 nations, including former President Bill Clinton and UN Secretary General Kofi Annan, were on hand for the transition. Indonesian President Megawati Sukarnoputri, a longtime opponent of East Timorese independence, also attended the celebration, despite opposition from hardliners.

This arid country of some 700,000 people is deeply poor and divided after 500 years of Portuguese colonialism and a brutal 25-year Indonesian occupation. After Indonesia lost the referendumin 1999, Indonesian soldiers and local militias destroyed most of the country's basic infrastructure.

While history is littered with independence and revolutionary leaders who failed to deliver in peacetime, Xanana has an almost paradoxical set of skills: He's a warrior who excels at making peace and a leader with no apparent lust for power.

"I never wanted to be president, and I don't want to be a president for any political party or any point of view,'' says Xanana, outlining a power sharing plan he hopes will heal the divisions that fed East Timor's 1975 civil war and prompted the Indonesian invasion. "At the beginning of this democratization process, we can't have divisions in our society," he says.

Xanana has a track record of healing divisions. After his 1978 escape from a fallen resistance base in the mountains, the first thing Xanana did was clip the wings of Fretilin, his original political party. The leftist party had won the civil war and saw itself as the rightful ruler of East Timor. "From the start, his focus was reconciliation," says Agio Perreira, a former clandestine independence operative.

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