that the situation remains precarious, the UN mission here said.

DILI (AFP) — UN Secretary General Ban Ki-moon has commended East Timor for overcoming last year's security crisis, but warned Wednesday that the situation remains precarious, the UN mission here said.

In his latest report to the UN Security Council, Ban said the successful completion of presidential and parliamentary polls this year was evidence of progress since unrest flared in 2006, according to the mission.

Street violence erupted in April and May last year between security force factions in the capital Dili after protests by dismissed soldiers, with at least 37 people killed and some 155,000 people displaced.

Sporadic clashes surrounding the swearing-in of the new government last month "demonstrate that not all divisions have yet been overcome," Ban said, according to a statement released by the mission.

"Elections are a fundamental step in consolidating democracy, but only an initial one," he said.

Some of the challenges relating to the 2006 crisis remained unresolved, such as the grievances of soldiers, ongoing gang violence and the situation of some 100,000 people who remain internally displaced, Ban said.

The new government faces "a delicate balancing act" in addressing problems stemming from the crisis while guaranteeing public security and tackling issues such as poverty, which continues to be a major cause of instability, he said.

The outbreaks of violence this year "serve as a reminder of the fragility of the security situation," Ban said.

"They also demonstrate that, despite the peaceful conduct of elections and wide acceptance of the results, there is still a need to nurture a culture of non-violence and promote the peaceful resolution of differences."

Arson, assaults and street clashes erupted after the former ruling party Fretilin failed to garner enough seats in June polls to form a majority government.

The new party of former president Xanana Gusmao managed to form a coalition that holds 37 seats in the 65-seat parliament.

Fretilin still insists the current government is unconstitutional but has ended an initial boycott of parliament by its lawmakers.