DILI (Reuters) - East Timorese Prime Minister Xanana Gusmao's party, which won elections though not a decisive majority this month, will form a coalition that excludes main opposition group Freitilin, the prime minister said on Sunday.
Gusmao's National Council of Timorese Resistance (CNRT) party will join the Democratic Party and the Frente Reform party in government, he said.
Angry Freitilin supporters stoned cars in front of their party headquarters after the decision was announced, a Reuters witness said, but there were no reports of casualties and the situation appeared under control.
East Timor, which has offshore gas resources, gained independence from Indonesia in 2002 and is Asia's newest and one of its poorest nations.
"We have made our decision. CNRT believes that the next coalition government will be better than the coalition government five years ago," Gusmao told a conference of the ruling party, which had also discussed forming both a coalition with Fretilin and a grand coalition.
The Supreme Court will announce the official result on Tuesday but preliminary results show the CNRT won 36 percent in the July 7 election and Fretilin took 29 percent, with the Democratic Party third on 10 percent.
Gusmao's party has prepared a $10 billion strategic plan to build infrastructure and improve agriculture to address poverty and raise living standards.
Indonesia invaded East Timor, a former Portuguese colony occupying half an island at the eastern end of the Indonesian archipelago, in 1975.
It spent decades trying to crush opposition to its rule before the territory won independence following a referendum. A U.N. mission promoting stability remains to this day.
(Reporting by Tito Bello and Lirio Da Fonseca; Writing by Matthew Bigg; Editing by Daniel Magnowski)