The house belongs to Manuel Carrascalao, a leader of the East Timorese independence movement. Hundreds of militiamen, who have vowed to uphold Indonesian rule, descended on the house after a two-hour parade which turned into a hunt for supporters of independence.
Mr Carrascalao's son, also called Manuel, is believed to be among the people killed. Mr Carrascalao went straight to the Indonesian army commander when he heard of the attack and asked for protection. The commander, Colonel Tono Suratman, told him in the presence of the visiting Irish foreign minister David Andrews: "I'm neutral. Ask your own people."
There were about 120 people in the grounds of the house before Saturday's attack, most of them refugees from militia terror in other parts of East Timor.
According to an eyewitness, "about 20 people" inside the house were killed by the militiamen. It was impossible to confirm the death toll, because the Indonesian army, which let the militiamen move freely around Dili, sealed off the house.
As many as a quarter of a million people are believed to have died in East Timor since Indonesia invaded in 1975. However, some Timorese support Indonesian rule. Jakarta announced in January, out of the blue, that East Timor could secede if its people wanted to.
Since then, pro-Indonesia Timorese have been arming themselves against the independence movement led by Xanana Gusmao, now jailed in Jakarta. Many people, including foreign diplomats, believe that hardline nationalists in the Indonesian army are supporting them in order to stop East Timor seceding.
"From 1974, we were always ready to talk peace. But Xanana has always killed people; he has always lied about East Timor overseas," said Joao Tavares, the leader of the militia, as a thousand of his men paraded outside the governor's office. Most pro-independence supporters have gone into hiding, but Mr Carrascalao appeared to have thought that he was too prominent to be attacked.
The Indonesian army, which claims impartiality, announced that eight people died on Saturday as the militiamen fought back against attacking pro-independence guerrillas, but there were no obvious signs of fighting instigated by guerrillas.Reuse content