EAST TIMOR'S PRESIDENT THREATENED TO RESIGN THURSDAY AFTER THE RULING PARTY REFUSED TO LET THE PRIME MINISTER STEP DOWN, DEEPENING A POLITICAL CRISIS IN THE TINY NATION FOLLOWING WEEKS OF BLOODY STREET BATTLES, AP REPORTED. ONE OF PRIME MINISTER MARI ALKATIRI'S CLOSE ALLIES, MEANWHILE, WAS ESCORTED BY FOREIGN TROOPS TO COURT FOR ALLEGEDLY PROVIDING ARMS TO A HIT SQUAD TASKED WITH SILENCING THE OPPOSITION. MANY EAST TIMORESE SAY ALKATIRI'S DECISION TO FIRE 600 DISGRUNTLED SOLDIERS IN MARCH WAS TO BLAME FOR SUBSEQUENT CLASHES AND GANG WARFARE THAT HAVE LEFT AT LEAST 30 PEOPLE DEAD AND SENT NEARLY 150,000 PEOPLE FLEEING FROM THEIR HOMES. THE PRIME MINISTER HELD EMERGENCY TALKS WITH MEMBERS OF HIS FRETILIN PARTY, WHICH CONTROL 55 OF THE 88 SEATS IN THE COUNTRY'S PARLIAMENT, AFTER PRESIDENT XANANA GUSMAO SAID HE MUST RESIGN OR BE FIRED. FRETILIN REAFFIRMED ITS SUPPORT FOR ALKATIRI, SAYING HE HAD ONLY RECENTLY BEEN RE-ELECTED AS THE HEAD OF THE PARTY, AND QUESTIONED THE PRESIDENT'S RIGHT TO DEMAND HIS OUSTER, SAID PARTY SPOKESMAN JOSE REIS. GUSMAO RESPONDED BY ACCUSING FRETILIN OF CREATING INSTABILITY. «IF THE SITUATION DOES NOT CHANGE BY EARLY TOMORROW MORNING, I WILL SEND AN OFFICIAL LETTER OF RESIGNATION TO PARLIAMENT,» HE SAID IN A 90-MINUTE SPEECH TO THE NATION. «FRETILIN'S LEADERS WANT TO KILL DEMOCRACY IN EAST TIMOR.»