The Roman Catholic bishop, in his first interview since being named co-recipient of the award Friday, said he hopes the prize will increase international pressure to stop fighting on the island for good.
Belo urged a referendum on autonomy as the best way to do that.
Indonesia has repeatedly rejected the idea, saying the East Timor issue has been settled. Belo said the government was wrong." Then what does it want?" Belo demanded. "That the 700,000 East Timorese people just bow their heads?"
Tens of thousands of people have been killed in Indonesia's attempt to crush an independence movement on the island territory it invaded in 1975, after Portugal pulled out during a civil war.
Belo insisted the annexation of East Timor is not final.
"Have you asked the people in villages what they really want?" he said in an interview with The Associated Press. "Don't think that all Timorese people have accepted the integration, and that everything is OK."
"It has not been for the past 20 years, and may not be for the next 20 years."
Belo's statements were his most confrontational since being named bishop 13 years ago.
The 48-year-old Belo is the most influential figure in East Timor, the only predominantly Catholic region in Indonesia, which, with 190 million people, is the world's largest Muslim nation.
Belo shared the prize with Jose Ramos-Horta, who was once a leftist guerrilla in a faction that fought Portugal.
The bishop suggested the United Nations sponsor talks among East Timorese groups and the governments of Indonesia and Portugal, and said he hoped the Nobel Prize would add some urgency to the struggle for a solution.
The Indonesian government of President Suharto, the long-ruling former general who ordered the 1975 invasion, has said it won't change its policies as a result of the Nobel.
"Indonesia has proved that it never yielded to pressure in the case of East Timor," its U.N. ambassador, Nurgoho Wisnumurti, said Sunday.
Suharto plans to visit East Timor on today to unveil a statue of Jesus Christ in an attempt to demonstrate his government's religious tolerance.
The Nobel citation blamed Indonesia for what it said were years of repression and terror after it seized East Timor, which it annexed a year later, in 1976.
"In the years that followed, it has been estimated that one-third of the population lost their lives due to starvation, epidemics, war and terror," said the awards citation.
Belo has condemned violence, whether by Indonesian troops or his own people.
The bishop declined to speak about Ramos-Horta, who Indonesia has alleged advocated murder and torture during the civil war. In an interview Monday, Ramos-Hora denied those accusations.
"I was away from East Timor during the civil war. I had no party in it," Ramos-Horta told The Associated Press.
"I was never part of the politburo or the military command," said Ramos-Horta, who lives in exile in Australia and travels the world seeking support for East Timor's independence.
Ramos-Horta was foreign minister during East Timor's brief independence after Portugal left, but said he had no command role in security forces.
Estimates of the number of people killed by fighting, starvation or disease between 1976 and 1980 range as high as 260,000, out of a pre-invasion population of 650,000.
The bishop plans to use his share of the $1.2 million that accompanies the Nobel Prize to finance seminaries and fund students seeking higher education.