Rebel soldiers seized the military's headquarters Thursday and replaced Papua New Guinea's top general with their own leader, who gave Prime Minister Peter O'Neill a week to step aside for his ousted predecessor.
The new crisis comes during a turbulent period for the South Pacific's most populous island nation, where both O'Neill and former Prime Minister Michael Somare claim to be the rightful leader.
The self-proclaimed new chief of the country's defense forces, retired Col. Yaura Sasa, insisted he was not mounting a coup.
But he warned that the military will take unspecified action unless O'Neill stands down and Somare is reinstated, as the national Supreme Court ordered last month.
"Both Sir Michael Somare and O'Neill have seven days to implement the Supreme Court's orders to resolve the current political impasse or I will be forced to take actions to uphold the integrity of the Constitution," Sasa told reporters in Port Moresby.
The government called on Sasa and his supporters to surrender and said the mutiny did not have support from the broader military.
Natural gas at stake
For many Papua New Guineans, the crisis is a contest between the old political guard of Somare — known as "The Chief" who led the country to independence — and O'Neill's administration, which is seen offering a fresh, more open alternative.
At stake is control over the country's resources revenue, led by U.S. oil giant ExxonMobil's $15.7 billion liquefied natural gas project due to come on stream in 2014.
Deputy Prime Minister Belden Namah told reporters that about 30 soldiers were involved in the mutiny and 15 of them have been arrested. Namah said Sasa could be charged with treason, which carries the death sentence.
The mutiny started before dawn, when rebel soldiers overpowered guards at the Taurama Barracks in Port Moresby.
They then moved to the military headquarters at Murray Barracks and placed the head of the Papua New Guinea Defense Force, Brigadier General Francis Agwi, under house arrest. There were no reports of bloodshed.
The Australian Embassy reported that Agwi was released from house arrest later Thursday, a development welcomed by Australian Foreign Minister Kevin Rudd.
Sasa, who last served as Papua New Guinea's defense attache to Indonesia before retiring from the military, told reporters he had been legitimately appointed defense chief by Somare.
Somare's spokeswoman Betha Somare told the Australian Broadcasting Corp. that his ousted cabinet had confirmed Sasa's appointment several days ago. Betha Somare, who is also Michael Somare's daughter, did not immediately reply to The Associated Press' request for comment on Thursday.
Namah said Somare had "no sanity" and was using "rogue soldiers to pursue his own greed and selfishness."
O'Neill had told Australia — Papua New Guinea's former colonial master and its main provider of foreign aid — that "authorities were taking steps to manage the situation," Australia's Department of Foreign Affairs and Trade said.
Australian Prime Minister Julia Gillard condemned the mutiny.
"The military has no place in PNG politics," she said in a statement.
"It is critical therefore that this situation be resolved peacefully as soon as possible, with the PNG Defense Force chain of command restored," she added.
Somare was Papua New Guinea's first prime minister when it became independent in 1975, and was knighted by Britain's Queen Elizabeth II.
Papua New Guinea's Parliament replaced him with O'Neill in August, while Somare was getting medical treatment outside the country.
Last month, the country's Supreme Court and Governor-General Michael Ogio backed Somare, who the court ruled was illegally removed.
But Ogio changed his mind days later, saying bad legal advice had led him to incorrectly reinstate Somare.