By Jahabar Sadiq and Ed Davies

DILI, June 29 (Reuters) - East Timor's leaders needs to join together to focus on fighting poverty and improving security after parliamentary elections in the tiny nation, President Jose Ramos-Horta said on Friday.

"So in five years, I believe we can have improved the lives of tens of thousands of people, and at the same time the country remains peaceful," he told Reuters in an interview in his modest office in the capital, a large map of Indonesian on the wall.

Speaking on the eve of the polls, Ramos-Horta, 57, said he was confident that he could work with a new government to help heal deep divisions in the country five years after independence.

East Timor descended into chaos last year after the army split on regional lines when the government sacked 600 rebellious troops. Foreign troops had to be brought in to restore order.

"I see my role as a bridge builder, mediator, conciliator, so that the county can heal the wounds and move forward," said Ramos-Horta, who won a Nobel Peace Prize for his decades-long campaign from exile for a peaceful end to Indonesian occupation.

Now grey-haired and wearing a collarless white shirt, the president said a new budget was needed quickly to help the poor.

"I've said that I am the president for the poor and I intend to be sincere and the strongest advocate"

CASH FOR THE POOR

He said the country should use the interest earned from a $1.2 billion oil fund, together with international aid and, possibly, bilateral borrowing to create jobs and slash poverty -- "if necessary with direct cash transfers into the pockets of the poor people".

Ramos-Horta said peaceful elections this week should help tens of thousands of displaced people living in camps since the 2006 violence to return home.

Ramos-Horta, who won a resounding victory in last month's presidential run-off, urged compromise in the event that no single party ended up with a majority, and said he was happy with the security situation during the elections.

There are 14 parties or coalitions contesting the poll, but it is widely seen as a showdown between the ruling Fretilin party and CNRT, a party launched by charismatic resistance hero Xanana Gusmao who after serving as president now wants the more hands-on post of prime minister.

"I'm not a dreamer or naive to expect that an election in my country or, in similar conditions in other countries, an election would be absolutely violence-free or absolutely fraud-free," Ramos-Horta said.

"So in this context I would say the elections here were remarkably peaceful, remarkably fair."

He also paid tribute to the 1,700 U.N. police and the large contingents of Australian and New Zealand troops helping keep the peace, and spoke out against any thought that they should leave the country in the near term.

Ramos-Horta, a former journalist, said he would be happy if the country got less media coverage in the next few years.

"I believe that Timor will disappear from the news because media channels, the TV clips, rarely ever talk about positive developments."

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