Hundreds of rampaging youths torched dozens of houses and clashed across East Timor on Thursday, leaving at least two people dead, the U.N. said, in violence sparked by the appointment of independence hero Xanana Gusmao as prime minister.

Authorities fired tear gas and made at least 14 arrests as political rivals clashed in several parts of the country, including the capital, Dili. Some wielded machetes, steel darts and bows, while others set fires to buildings, police and witnesses said.

In one town near Dili, international peacekeepers "managed to control the situation, but the market was almost completely destroyed in the fighting," the U.N. said. Two people were killed in violence in the central district of Ermera, the U.N. said, without providing further details.

Dozens of houses were set ablaze in the town of Metinaro, 15 miles east of the capital, police said.

East Timor, a former Portuguese colony, broke free from decades of Indonesian rule in 1999 and formally declared statehood three years later.

It descended into chaos last April when communal violence left 37 people dead and sent 155,000 people fleeing their homes. It is struggling to restore political stability amid extreme poverty and severe food shortages.

Unrest flared again on Aug. 6, after three rounds of elections, when Gusmao was named the head of a new government. The move angered supporters of the former ruling party, Fretilin, which won most votes in a parliamentary poll in June.