East Timor President Jose Ramos-Horta was Tuesday in a serious but stable condition after surgery overnight for gunshot wounds from an assassination attempt that plunged the nation into a fresh crisis.

The new round of surgery, the second in 24 hours, came amid international outrage at the coordinated attack on the Nobel peace laureate by rebels at his residence on Monday in the East Timor capital.

UN Secretary General Ban Ki-moon said he was "shocked and dismayed" over the attack and appealed to the nation's one million people to remain calm.

Gunmen also targeted the home of Prime Minister Xanana Gusmao in Monday's dawn raid in which rebel leader Alfredo Reinado was killed, officials said.

Gusmao, who was uninjured in the ambush, announced a state of emergency in the fragile nation, where international forces remain on patrol after being deployed amid unrest in 2006.

Ramos-Horta, 58, was airlifted to the Australian city of Darwin for emergency medical treatment after exploratory surgery at an Australian-run military hospital in Dili.

Royal Darwin Hospital General Manager Doctor Len Notaras told AFP that Ramos-Horta had undergone two and a half hours of surgery late Monday but was recovering well, although he was still in an "extremely serious condition".

Doctors removed fragments of one bullet and worked on the lower lobe of his right lung, which was badly damaged, Notaras said.

In Dili, Gusmao vowed to restore stability in a press briefing broadcast live on television and radio.

He confirmed that rebel leader Reinado had died at the home of Ramos-Horta. The president and rebel had met previously for negotiations on his surrender.

Reinado emerged as a key figure in the 2006 unrest involving factions of the military and police that led to the deaths of at least 37 people and displaced more than 150,000 others.

He was arrested on charges of illegal weapons distribution, desertion and attempted murder. He had however escaped from jail and eluded security forces since then.

PHOTO CAPTION

Portuguese troops patrol a street in Dili. East Timor President Jose Ramos-Horta was Tuesday in serious but stable condition following overnight surgery for bullet wounds sustained in an assassination bid, a doctor said. (AFP)

AFP