The continuing violence in Dili has forced the temporary evacuation of the New Zealand embassy as peacekeeping troops struggle to stave off civil war.

New Zealand ambassador Ruth Nuttall and her staff had to be evacuated to the more heavily fortified Australian embassy compound.

Defence Attache Colonel John McLeod has told TVNZ the embassy had been been targeted by armed thugs for giving refuge to two teenage survivors of Thursday's brutal murder of a mother and her five children.

The woman had apparently been singled out for being related to East Timor's Interior Minister.

"Now there are some threats from the people we saw before who [went] through the streets with machetes and such, that they are going to come here and attack the embassy and basically kill these people," he said.

Ms Nuttall and her staff were later able to return to the embassy after it was secured by Australian and New Zealand troops.

By New Zealand correspondent Peter Lewis