DILI, June 19 (Reuters) - East Timor President Jose Ramos-Horta ordered security forces on Tuesday to stop hunting for an army renegade accused of involvement in last year's wave of violence.

Alfredo Reinado escaped last August along with 50 other inmates from a prison where he was being held on charges of involvement in last year's violence that killed 37 people and drove 150,000 from their homes earlier that year.

"I have heard all parties, including the United Nations, and today I decide the police and military operation to capture Alfredo Reinado and his members should be stopped today," Ramos-Horta told reporters.

He said the prosecutor-general should discuss with Reinado terms for his surrender and weapons handover under the mediation of the Catholic church.

"I believe in justice for all," he said.

Reinado told Reuters earlier this month he would personally seek out those behind last year's violence if the government refused to negotiate with him immediately.

Reinado, East Timor's former military police chief, has been accused of raiding a police post and making off with 25 automatic weapons while on the run.

He has said he would only turn himself in once the ruling Fretilin party was no longer in power and foreign troops sent into East Timor after last year's violence were out of the country.

Ramos-Horta, a Nobel peace prize winner who spent years abroad as a spokesman for East Timor's struggle for independence from Indonesian occupation, was installed as president last month.

His victory has raised hopes of greater stability in a nation still struggling to heal divisions five years after it won formal independence from Indonesia.

East Timor will vote again in parliamentary elections on June 30.

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