Twenty-three years after seizing control, the Jakarta government has offered the former Portuguese colony a referendum on autonomy or possible independence.
However, local army commanders and their allies are not prepared to let East Timor go without one last stand. Although the Indonesian army chief, General Wiranto, brokered a ceasefire among East Timorese factions last week, there were reports that dozens of people had been killed in a remote corner of the territory. As in the capital, Dili, last weekend, independence supporters were said to have been attacked by local militias, armed and encouraged by the military.
On Friday the United Nations Secretary-General, Kofi Annan, announced agreement on the referendum between Portugal and Indonesia. He said it would be signed on 5 May, because extra time was needed for the Indonesian government to approve two new documents that will be part of the agreement: on how the ballot will be conducted and security arrangements. Indonesia's Foreign Minister, Ali Alatas, said he would have to consult his government on the details.
Gen Wiranto is among those whom Mr Fatchett is to meet on his four-day visit. He will also discuss East Timor with President B J Habibie.
While there is a surge of diplomatic activity to try to resolve the East Timor problem, on the ground violence continues. One Western diplomat in Jakarta was on the telephone to Manuel Carrascalao, 18, half an hour before militiamen burst into his house and hacked and shot him to death, along with at least 11 other people. "I think that was the worst day of my life," the diplomat said.
Indonesia suddenly offered East Timor the possibility of independence in January, after insisting for years that the poor and arid land was an integral part of the republic. A UN-supervised vote on autonomy was set for July. If the East Timorese voted against it, Jakarta promised, they could secede.
But the civilian government cannot control the soldiers, who have their own agenda. Local army commanders, thousands of whose troops have died fighting for Indonesian rule, are unwilling to let East Timor go. Another motive, Western diplomats believe, is that much of the territory's annual budget of $120m goes into the pockets of soldiers and civil servants.
The real issue is not autonomy, but whether the East Timorese want Indonesian rule in any form.