Reuters International

The Parliament House building of the small island nation of Nauru is pictured, in this February 10, 2012 file photo. REUTERS/Rod Henshaw

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By Colin Packham

SYDNEY (Reuters) - The tiny South Pacific island of Nauru urged calm among 500 asylum seekers held in detention on behalf of Australia after two set fire to themselves and others self-harmed.

Under Australia's hard-line immigration policy, asylum seekers intercepted trying to reach the country by boat after paying people smugglers are sent for processing to a camp in Manus Island in Papua New Guinea or to Nauru.

The remote detention centre on Nauru has been widely criticised by the United Nations and human rights agencies for its harsh conditions and reports of child abuse. Many staying there have self-harmed.

A young Somali woman on Monday set herself on fire at the camp, the second such attack in a week. The first victim died.

Nauru said it was working on finding a permanent home for the detainees.

"I want to assure you that future long-term and permanent settlement options are actively being considered and planned for you," David Adeang, minister for multicultural affairs, said in a video posted on the government website.

"But while you are here, we urge you to use your time on Nauru constructively and peacefully."

But detainees, many of whom have been on Nauru for years, said tensions were high, with many devoid of hope.

"I don't want to be alive. I see my wife suffering and I can't do anything, I can't change anything." Iranian Amir Zaire, 30, told Reuters. "We have been at this camp for three years, like animals."

While tensions on Nauru are rising, Australia's second offshore detention centre on Manus Island, off Papua New Guinea, has been ordered closed after the country's Supreme Court ruled the facility unlawful, leaving the fate of the 850 people held there up in the air.

Australia and Papua New Guinea each claim each other is responsible for settling the hundreds held on Manus.

Legal action in PNG and Australia has begun, with lawyers acting for the majority of people held on Manus arguing that they should be immediately be resettled in Australia.

But Australian Prime Minister Malcolm Turnbull on Thursday reiterated the Manus Island detainees would not be resettled in Australia.

(Reporting by Colin Packham; Editing by Nick Macfie)

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