By Evelyn Leopold

UNITED NATIONS, Sept 11 (Reuters) - The U.N. Security Council called on East Timor to refrain from further violence after mayhem erupted when independence leader Xanana Gusmao became prime minister last month.

In a statement read at a public meeting on Tuesday, the council emphasized "the need for all parties to resolve any disputes through exclusively peaceful channels and within the framework of democratic institutions."

Last month, President Jose Ramos-Horta appointed a coalition led by Gusmao after no single party won a majority in a June 30 parliamentary election.

The move triggered violent protests by supporters of the Fretilin party, which led East Timor's 24-year struggle against Indonesian rule. Fretilin had won most of the votes in the June election and claimed the right to govern.

East Timor's Foreign Minister Zacarias da Costa, who addressed the council, said that the protests in two districts resulted in 323 houses burned to the ground, affecting some 6,000 people in the impoverished country of 1 million. This was in addition to some 100,000 people without homes.

The statement, read by Council President Jean-Maurice Ripert of France, called on "the people of Timor-Leste to refrain from violence and work together in order to ensure security."

The Security Council also reaffirmed "the need for justice and accountability" after Indonesia, a member of the council, deleted any reference to "past crimes." Compared to a resolution all 15 council members have to approve a statement.

A commission has been set up by Indonesia and East Timor to look into events surrounding the independence vote, which the United Nations is boycotting because it can recommend amnesty for serious crimes against humanity.

Human rights and Timorese victims groups have criticized the commission for not challenging witnesses and checking facts. They say the truth was being distorted, particularly by those blaming the United Nations for inciting violence when it organized the independence referendum.

In 1999, after Timorese voted for independence from Indonesia under U.N. supervision, rioters killed thousands, left few buildings standing and forced 250,000 people from their homes.

The rampage was conducted by pro-Jakarta militia, with support of the Indonesian military based in Timor.

Australia sent in troops to restore order, replaced a few months later by U.N. peacekeepers in the former Portuguese colony that Indonesia invaded in December 1975.

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