But any regional refugee processing center must be run by a third party such as the United Nations.

Above all, the center must be temporary for Timor-Leste, formerly East Timor until 2002 and lying off Australia's northeast coast. It occupies the eastern half of the island of Timor. The western half remains part of Indonesia.

Even if his mountainous and impoverished nation were to accept a shelter, Ramos-Horta said he doesn't want other countries including Indonesia to use Timor-Leste as a dumping ground for their own refugees held in overcrowded facilities.

"Purely on humanitarian grounds, we are prepared to listen to the details of the proposal on the part of Australia about what where this processing center would be, how long it would be on our soil, how many people we would have to accommodate in this center, who would shoulder the burden of the financial cost of it, all of that," he said.

"If there are people in Indonesia who are already have been already interviewed, who have been cleared, who are people in desperate need of settling elsewhere on a permanent basis then I don't understand the point of moving them from Indonesia to Timor-Leste."

He also said there has not been a formal request from Australia, although he has had talks on the telephone with new Australian Prime Minister Julia Gillard.

"Each and every one of us will think of our own background, how only a few years ago Australia hosted us when we fled violence, how Portugal and other countries gave us asylum, gave us shelter, gave us food, gave us jobs," he said.

"Today we are in a slightly better situation and we should open our doors to those who flee persecution or flee extreme poverty."

Gillard is likely to come under increasing pressure from voters and the opposition parties to cut a deal with neighboring countries, no matter how small and impoverished, such as Timor-Leste, to take in some of the boat people arriving in Australian waters.

The issue of what to do with the continuous stream of boat people, mostly Tamils from Sri Lanka, is a contentious political issue. By the end of the year Gillard will face the electorate for the first time as prime minister after being appointed to the job by her Labor Party last month.

The previous prime minister, Kevin Rudd, on one occasion personally telephoned the Indonesian president asking his country to intercept the boats, organized by notorious people smugglers, in Indonesian waters rather than letting them slip through to their final destination, Australia.

Australian authorities are putting the asylum seekers in what is an acknowledged overcrowded detention center on their Indian Ocean territory of Christmas Island. Many are later moved to mainland Australia as bona fide asylum seekers or to other detention centers where their status is established.

Ramos-Horta said Timor-Leste would not be bullied into having a detention center, nor would it be blackmailed economically over the issue.

Timor-Leste has proposed a $3.3 billion liquefied natural gas pipeline from the Greater Sunrise fields to an onshore LNG plant near the capital Dili.

But Australia's Woodside Petroleum is proposing the pipeline terminal as an offshore, floating LNG port.

Woodside, and its partners Shell, ConocoPhillips and Osaka Gas, also said an onshore terminal would be more costly than the government's estimate, coming in at around $8 billion.

Timor-Leste stands to make billions of much-needed foreign currency out of the project. But the government said it is prepared to block Woodside's development of the field, even though it could cost his nation billions of dollars in lost revenue.

"Neither I, nor the prime minister, nor anyone in this country, would debase ourselves by linking something that is purely humanitarian, out of our deepest convictions as human beings, with something like a pipeline or any other thing," Ramos-Horta said.

"We will not bargain with Australia, we will not bargain with anyone. We will help the desperate people only if you give us this and that? No. That is not in my culture, not in my convictions. No, that is out of the question."

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