Portugal during World War II
Upon the start of World War II in 1939, the Portuguese Government announced on 1 September that the 600-year-old Anglo-Portuguese Alliance remained intact, but that since the British did not seek Portuguese assistance, Portugal was free to remain neutral in the war and would do so. In an aide-mémoire of 5 September 1939, the British Government confirmed the understanding. As Hitler's occupation swept across Europe, neutral Portugal became one of the Continent's last escape routes. Portugal managed to remain neutral throughout the war despite extraordinary pressures from both sides, notably over the strategically located Azores islands and over the wolfram (tungsten) trade.
Portuguese Timor
Although Portugal was neutral during World War II, in December 1941, Portuguese Timor was occupied by a small British, Australian and Dutch force, to preempt a Japanese invasion. However, the Japanese did invade in the Battle of Timor in February 1942. Under Japanese occupation, the borders of the Dutch and Portuguese were overlooked with Timor island being made a single Japanese army administration zone. 400 Australian and Dutch commandos trapped on the island by the Japanese invasion waged a guerrilla campaign, which tied up Japanese troops and inflicted over 1,000 casualties. Timorese and the Portuguese helped the guerillas but following the Allies' eventual evacuation, Japanese retribution from their soldiers and Timorese militia raised in West Timor was severe. By the end of the War, an estimated 40–60,000 Timorese had died, the economy was in ruins, and famine widespread. (see Battle of Timor).