East Timor President Horta to return home Thursday

CANBERRA, April 14 (Reuters) - East Timor President Jose Ramos-Horta will return home to Dili and resume his presidential duties on Thursday, two months after nearly losing his life in an assassination attempt by rebel soldiers.

Ramos-Horta, shot twice and critically wounded on February 11, said he would return from Australia to his isolated Dili residence, despite advice from security officials to move to a more secure location.

"God is on my side. The people of Timor are on my side," Ramos-Horta told Australian media late on Sunday.

"I will resume my functions as president, go back to my house and the people in the country, tens of thousands all over the country are waiting for me," he said.

Banners have been hung over Dili streets saying "Mr President, Timor prays and waits for you", while Ramos-Horta's home has been cleansed of "evil spirits" and nearby trees white-washed, newspapers said on Monday.

"These weeks I have received a lot of messages from Timor, from the bishops and the priests, the politicians. I knew I was somewhat popular in the country but I didn't realise the depths of the feelings of the people," Ramos-Horta said.

The 58-year-old Nobel peace prize winner, who has been convalescing at a safe house in Darwin where he was airlifted after the shooting, said he would resume full duties on his return, although he was only "90 percent healed".

"I still have problems with the nerves that were damaged by the bullet," Ramos-Horta said.

Ramos-Horta was elected last year until April 2012. The presidency, under East Timor's Portuguese-based constitution, is largely ceremonial, with power resting with Prime Minister Xanana Gusmao, who escaped an assassination attempt on the same day.

East Timor, Asia's youngest nation has been unable to achieve stability since its hard-won independence from Indonesia in 2002, despite oil and gas resources and a population of 1 million that is one of the world's fastest growing at around 4 percent a year.

The East Timor army fractured along regional lines in 2006, when about 600 soldiers were sacked, triggering violence that killed 37 people and drove 150,000 from their homes. More than 2,500 foreign peacekeepers remain in the country.

(Reporting by Rob Taylor, editing by Sanjeev Miglani)