A new round of talks between East Timor and Australia over the Timor Sea oil and gas riches kicks off in Sydney today under murky circumstances. The negotiations are buried under the post-Budget avalanche and amid DFAT warnings that terrorists are planning a series of attacks on places frequented by Australians in Dili.

Both sides are trying to hose down public dissent. In Canberra today a rally in support of 50 East Timorese facing deportation has been abruptly called off. The event’s organisers, the Josephite nuns from the Mary MacKillop Institute of East Timorese Studies in Sydney, emailed their supporters with the news last night.

Sister Susan Connelly was supposed to lead a busload of deportees and their supporters to Canberra, but instead told supporters the rally was called off “on the advice of the Timorese Consul-General, Mr Abel Guterres”. Guterres told her high level talks between East Timorese and Australian officials in Australia over the fate of the deportees were taking place, and proceeding with the rally would not be in their best interests.

Two weeks ago, Australian businessman Ian Melrose received a phone call from the office of East Timor’s Foreign Minister Hose Ramos-Horta. Melrose was told the Timor Sea talks between East Timor and Australia was getting on well and they were close to a deal. He was advised not to proceed with his controversial oil advertisements because it would not be in the best interest of the talks. He was also told he would be wasting his money by proceeding with the ads.

Melrose received his phone call just before the last round of talks in Dili on 27 April. Now Sister Connelly has been told to call off her rally the day the Sydney round of talks begins. The East Timorese Consul-General’s office comes under Horta’s Foreign Affairs office.

Sister Connelly told Mike Carlton last Saturday that she was “at a loss for any other explanation, she wonders if these 50 souls are being used as some sort of bargaining chip in the Australian Government’s negotiations over East Timor’s rich oil and gas fields.”

Amid the uncertain environment, it’s hard not to think Sister Connelly has got a point here.