East Timor's president says he doesn't want his country to become an "island prison" and any processing centre for asylum seekers would have to be humane.

The federal government wants to process asylum seekers in East Timor, but it's not clear if the fledgling nation will agree.

President Jose Ramos-Horta indicated he was open-minded to the proposal.

"If we're to do it, we do it out of our personal humanitarian, our collective convictions in helping other poor people who flee persecution," he told ABC Television.

"I would never turn my back on people who flee violence in Afghanistan or wherever, but on a temporary basis."

Dr Ramos-Horta said he would not bargain with the Australian government about costs, but East Timor would have to be paid to provide food, shelter, clothes and medicine to the asylum seekers.

And conditions would have to be humane.

"I wouldn't want Timor Leste to become an island prison for displaced persons fleeing ... violence."

"If they were here, they will have to have certain freedoms."

Dr Ramos-Horta indicated he would like asylum seekers to have jobs, and not to sit idle, if the proposal went ahead.

He planned to speak to East Timor's prime minister Xanana Gusmao in the next day or so about the proposal; both would want to hear more details.