Aided and abetted by the Indonesian army they plotted their rampage through East Timor where they would kill with impunity in isolated villages and mountain ravines.
They would later torch the churches and the homes of their pro-independence neighbors.
The Australian Government knew all about it because its spies were watching. They had what some describe as a "ringside seat" to the bloodshed and orchestrated killings. But the government said nothing until it was much too late to stop it - except to deny publicly it was happening - and so, the wholesale killing became inevitable.
The plans for secret war by the pro-Indonesian militias and Indonesian forces in East Timor, largely against civilians who favored independence, were recorded by the Australian espionage network, which often told the government what it did not want to hear about East Timor.
There are now claims the government feared its valued alliance with Indonesia could crumble if the world knew what was about to happen and if Australia was forced to take action against its neighbors to stop the killings. As the government continued to ignore the chilling accounts of death and brutality, and some in the intelligence community sanitised their accounts from East Timor so the government would get the reports it wanted, splits developed among the intelligence agencies and with the Department of Foreign Affairs.
Australia's closest ally, the United States, was not told the full truth about what was happening to the people of East Timor.
The intelligence debacle, and the circumstances around the government's double standard, has been linked to the suicide of a senior Washington-based intelligence analyst, Mervyn Jenkins. He was investigated because he had done his job, to pass information on what was happening in East Timor to his US intelligence counterparts.
But in East Timor hundreds died unnecessarily as a result of Australia's silence, says one of Australia's most respected defence analysts, Professor Des Ball, of the Australian National University's Strategic and National University's Strategic and Defence Studies Centre.
The Howard Government politicised the intelligence process with grievous consequences, says Professor Ball in a paper to be published in the London-based journal Pacific Review.
"The Prime Minister's office and the senior bureaucrats from the Departments of Defence and Foreign Affairs did not want to know about ABRI's (Indonesia's armed forces) involvement in militia violence," Professor Ball says.
"The Prime Minister's key advisers believed that the violence could be contained, that Australia's close defence relationship with Indonesia would be a sobering influence on Indonesian behavior in East Timor and that any necessary external assistance should come from Australia rather than the United Nations."
There is no shortage of critics of the Australian role in not making public what it knew about the mass murder and those who planned it.
Bernard Collaery, a former ACT attorney-general who is in Dili as legal adviser to East Timorese leader Xanana Gusmao, also believes that had the information been passed on, the UN could have acted more quickly and saved lives by setting up havens.
"We were the pre-eminent intelligence gatherers and we had a responsibility to get the information out," he says.
"Individual UN officers tell me that material of the kind subsequently leaked was not in New York, certainly not in UN hands."
Mr Collaery condemns those who sanitised intelligence reports to please the government.
"It was the clerical dissemblers who reworded the analysis, a typically temporising and gutless spin," he says.
James Dunn, a former Australian consul to East Timor and now a member of the UN team investigating militia killings, says his investigation is focusing on senior Indonesian officers responsible for the killings.
Mr Dunn, who believes up to 2000 people died, twice the official estimate, thinks he can gather enough evidence to prosecute several senior Indonesian officers for war crimes.
The superb Australian-US intelligence network meant there was never any doubt as to what was happening in East Timor and that the militia and the Indonesian army were complicit in mass murder.
Much of the intelligence system was already in place, but in mid-1999 United States Air Force transport planes flew tonnes of sophisticated intelligence gathering equipment into Australia to strengthen a massive electronic spying operation against Indonesia and its agents in East Timor.
The beefed-up system meant that as Indonesian officers and the leaders of East Timorese militia groups spoke on mobile and satellite phones about their conspiracy to disrupt the United Nations-sponsored independence ballot in September, 1999, Australia's intelligence agencies were listening.
Intelligence agencies also intercepted signals indicating that many East Timorese were being killed on boats or on land and their bodies taken out to sea and dumped.
Soon after 60 East Timorese were massacred in a church at Liquica, the DSD and ASIS (Australian Secret Intelligence Service) identified the senior Indonesian officers involved and reported that the chain went up to General Wiranto.
On September 9, the DIO was able to tell the government from intelligence gathering that the Indonesian army wanted to use a victory in East Timor as a springboard to propel General Wiranto into at least the vice-presidency.
As the intelligence data continued to flow, US aircraft delivered tonnes more surveillance equipment to the Australian agencies and the intelligence gathering operation was stepped up dramatically.
From March the RAAF's P-3C Orion aircraft, laden with such equipment, were flying around Timor sweeping up signals from mobile and satellite phones on which Indonesian officers and militia leaders involved in the killings were speaking freely.
The US realigned one of its spy satellites, controlled from Pine Gap, so that it could pick up high-frequency signals from radios and satellite phones.
US warships also secretly tapped Indonesia's underwater communications cables carrying military calls.
This conversation between an Indonesian special forces officer and a militia leader was intercepted: "We can't be the first ones to start it. We have to be on standby so that we won't get a bad mark from Unamet (the UN mission in East Timor).
"But if we're not the first ones and fight back then we're on standby. But if they fish for it then we will use the hard hand. There's no other way out. That's how it will be.
"It is better we wait for the result of the announcement (of the ballot). Whether we win or lose that's when we'll react."
One intercepted signal said a large number of students were killed at sea on September 7.
That fits in with the assessment of the US human rights group, the Carter Centre, which concluded in its final report in June this year that 35 young men were murdered on September 7 on a ferry called the Dobon Solo.
In April, 1999, ASIS pulled off a startling coup when one of the key militia leaders, Tomas Goncalves, defected to Macau and gave a Hong Kong-based Australian intelligence officer a detailed account of Indonesia's plans to wipe out the independence movement.
Goncalves said he was given three truckloads of weapons to distribute and was told by the governor of Timor, Abilio Osorio Soares, to prepare to liquidate all the senior pro-independence people, including their parents, sons, daughters and grandchildren. If they sought shelter in churches, "kill them all, even the priests and nuns".
But Professor Ball says that because the intelligence agencies produced "grimmer prognostications than the government wanted" policy makers ignored unpalatable information and the professionalism of senior intelligence officials lapsed.