I had nurtured the dream that after independence I would have time to cultivate pumpkins and animals

Xanana Gusmao

Mr Gusmao - widely viewed as the hero of the struggle for independence - said he was standing in response to pressure from the people, and with the encouragement of foreign governments.

The announcement ends months of speculation and reverses previous statements that he would not stand in the election expected early next year.

Our correspondent Richard Galpin says it is almost a foregone conclusion that Mr Gusmao will now be elected president next year.

Credible leader

To cheers and applause, Mr Gusmao told a meeting in the capital, Dili, that he was ready to accept the candidacy for president, but added: "I am conscious that I am not the best person for the job.

"It's true that I have begun to feel tired as a consequence of 25 years of heavy responsibility.

He is not terribly happy but he's a remarkable individual

Independence leader Jose Ramos Horta

"I had nurtured the dream that after independence I would have time to cultivate pumpkins and animals."

He added: "I changed my position because of pressure from the people and from foreign governments, including the US."

Most Timorese see Mr Gusmao, 55, as the only credible leader who can unite the fledgling nation.

East Timor has been administered by the United Nations since its people voted to break away from Indonesia in 1999. It is expected to gain full independence in 2002.

Hero

Independence leader Jose Ramos Horta told the BBC that Mr Gusmao was persuaded to run because he had the overwhelming support of the people and the international community, and he was seen as the only candidate who had the respect of the Indonesian military, which occupied East Timor for some 25 years.

Indonesia militia killed many during the independence vote

He said: "He bowed to the pressure.

"He is not terribly happy but he's a remarkable individual.

"Now he has accepted his responsibility and he will fulfil his mandate when he's elected with generosity, with total dedication to the people."

The UN's administrator in East Timor, Sergio Vieira de Mello, said: "It will send a very powerful message to the Timorese people.

"I think this will inspire confidence to the population and I believe it's the right choice because Xanana has an important role to play."

Mr Gusmao led a guerrilla war for many years against Indonesia, which invaded East Timor in 1975. He was captured in 1992 and imprisoned until 1999.

Constituent assembly

His announcement comes days before East Timor holds its first democratic election for an 88-member assembly that will draft a constitution.

The assembly will decide on what system will be used to govern East Timor.

It will also decide how the country's president and parliament will be elected.

Mr Gusmao said his candidacy was conditional on a peaceful outcome to the vote on Thursday, which must be accepted by all political groups.

"This means each party must promote... the policy of tolerance and mutual respect in the democratic spirit which we are all engaged in developing," he said.

After the East Timorese voted to sever ties with Indonesia in 1999, a campaign of killings and destruction by pro-Jakarta militias gripped the territory until an Australian-led international peacekeeping force arrived in September 1999.

The United Nations now administers East Timor with the help of a peacekeeping force of nearly 8,000 troops.