The US has resumed full relations with the Indonesian military by lifting a six-year-old arms embargo and announcing it was ready to provide additional defence funding and counter-terrorism assistance to Jakarta.

Washington’s move on Tuesday drew immediate condemnation from rights groups concerned that lifting the embargo imposed after Indonesia’s withdrawal from East Timor in 1999 would ease pressure on Jakarta to punish senior military officers involved.

“US support for an unreformed military which remains above the law is not in the interest of the United States or Indonesia,” the Washington-based East Timor Action Network said in a statement. “This is a profoundly disappointing and sad day for human rights protections everywhere but especially in Indonesia, East Timor, and the US.”

US military ties with Indonesia were scaled back in 1992 after a massacre of civilians in East Timor. They were further curtailed after about 1,500 people were killed by pro-Jakarta militias and the security forces in connection with an August 1999 vote for independence by East Timor’s 800,000 people.

The arms embargo has hurt Indonesia’s military, leaving most of the F-16 fighters it bought from the US grounded and prompting it to seek alternative sources of weapons in China and Russia. The government of Megawati Sukarnoputri bought four Sukhoi jets and two helicopters from Russia in a $200m counter-trade deal in 2003 while Beijing earlier this year agreed to help Jakarta revive a programme to develop short- and medium-range missiles.

But the embargo has done little to force Jakarta to hand over senior military officers indicted on charges of crimes against humanity by UN prosecutors in East Timor or conduct credible trials of its own.

That, together with more recent allegations of military atrocities committed during the fight against separatists in the provinces of Aceh and Papua, has led to charges the Indonesian military still enjoys the impunity it had under strongman Suharto.

Defending the change in policy, the US State Department said it attached the “utmost importance” to its relationship with Jakarta and called Indonesia “a voice of moderation in the Islamic world.”

It insisted that Jakarta had made significant progress in reforming its democratic institutions and practices, while playing a key role in securing strategic sea lanes in southeast Asia.

Through its increased aid, the US “will help modernise the Indonesian military, provide further incentives for reform of the Indonesian military, and support US and Indonesian security objectives, including counterterrorism, maritime security and disaster relief,” the State Department said.

In a reference to East Timor, the State Department insisted that Washington “remains committed to pressing for accountability for past human rights abuses.” It also said US assistance would be “guided by Indonesia’s progress on democratic reform and accountability.”

Indonesian President Susilo Bambang Yudhoyono said to a local radio station while on a state visit to New Delhi: “This is a new page, a new chapter in the strategic relations between Indonesia and the United States which have since 1999 gone through substantial ups and downs in relation to its defence cooperation.”

“The essence is that the sanction, or embargo imposed by the United States, has been lifted.”

Mr Yudhoyono said the US International Military Education and Training (IMET), Foreign Military Sales (FMS) and Foreign Military Financing (FMF) programmes were now “back to normal.”

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