The Brisbane Times reports that Fr Conceicao, who is parish of Same, protested over the 8 March raid on the hamlet of Serema.
Fr David Alves Conceicao said villagers had been terrified by the arrival of four Black Hawk helicopters and a troop transport, apparently acting on information they were harbouring the fugitive Major Reinado, who remains on the run.
"Houses were assaulted and people ordered out in the middle of the night for searches," the priest said by telephone.
"Poor farmers, old people.
"This is a peaceful population, and this is a problem that will not be resolved by force. If someone who was a friend to us uses force, it will provoke a reaction."
Both the church and local people claim that houses were destroyed during the raid, the Times says.
Images of around 10 damaged houses were shown on East Timorese national television last night, and Social Democrat deputy Riak Leman protested in parliament yesterday.
Conceicao said the military operations in Same district were continuing on a daily basis.
"It's like living on a battlefield," he said.
But Australian force commander Brigadier General Mal Rerden denied houses had been destroyed.
"Our operations in Same were conducted to minimise damage to the civilian population and protect it from Reinado and his group", he told the Brisbane Times.
He said there had been some "very minor damage to a few houses" and that troops had returned to help villagers with repairs.
Meanwhile, the Age reports that Major Reinado has told local journalists that he wanted the Catholic Church to mediate a surrender.
"I'm always ready to dialogue - dialogue is better so that we can prevent any threats against the nation that could lead to civil war," Major Reinado said.
Aussie troops accused of damaging Timor village (Brisbane Times, 14/3/07)
Timor fugitive humiliates ADF troops
LINKS (not necessarily endorsed by Church Resources)
Alfredo Reinado (Wikipedia)
New Timor Nuncio presents credentials, calls for end to conflict (CathNews, 2/3/07)
Ramos-Horta seeks Catholic nod for Timor presidency (CathNews, 266/2/07)
Indonesia-Timor commission promotes reconciliation (CathNews, 8/2/07)
First graduates from ACU Timor teachers course (CathNews, 23/11/06)
Former Timor PM blames Church over ouster (CathNews, 10/11/06)
East Timor situation calm for All Saints (CathNews, 3/11/06)
Nobel prize Bishop meets Timor rebels and ex-PM (CathNews, 27/10/06)
Men killed outside Dili Church as Timor's PM leaves to see Pope (CathNews, 24/10/06)
Timor bishop in bid to prevent new violence (CathNews, 13/10/06)
Timor highlanders back fugitive rebel with prayers (CathNews, 11/9/06)
'Big people' must reconcile, say displaced Timorese (CathNews 15/8/06)
Priest says coffee growers big losers in Timor unrest (CathNews 21/7/06)
Ramos-Horta wants Vatican embassy for Timor (CathNews 11/7/06)
Timor Church accused of plotting coup (CathNews 29/6/06)
Timor Church to pursue truth and dialogue (CathNews 28/6/06)
Diocese prepares to aid fleeing East Timor refugees (CathNews 11/5/06)
East Timor Catholic leaders appeal for calm after riot (CathNews 5/5/06)
Thousands shelter in Catholic centres after East Timor riots (CathNews 3/5/06)
West Timor bishop tells Govt it's time to act on refugees (CathNews 13/3/03)
14 Mar 2007