The first visit by Indonesian President Susilo Bambang Yudhoyono yesterday prompted Prime Minister Helen Clark to say New Zealand had "closed the chapter" on atrocities committed in East Timor in 1999.
She said there had been a great surge in democratic reform in Indonesia in recent years and future trade talks were not dependent on issues of human rights.
But she did not use the largely symbolic and economically focused visit to lift a ban on military ties between the two countries, imposed because of the failure of Indonesia to bring to justice those who killed hundreds of East Timorese.
The restoring of defence links was not discussed in two hours of talks, but sensitive issues around the suppression of secessionist movements in the provinces of Aceh and West Papua were.
President Yudhoyono's visit, the third by an Indonesian leader, comes just six months after his election as he embarks on reforms aimed at revitalising his country's economy.
New Zealand and Indonesia have not embarked on bilateral trade negotiations, but the two countries will reopen an economic dialogue and Mr Yudhoyono yesterday confirmed Indonesia would support New Zealand's participation in the first East Asia summit to be held in Malaysia in December.
Despite a glitch at his official welcome at Government House, where he appeared to be uncomfortable with Maori protocol, his first day in New Zealand was most notable for the exchange of compliments between him and Helen Clark.
Mr Yudhoyono described her as his "good friend", and pointed to co-operation between New Zealand and Indonesian military forces in relief work after the Boxing Day tsunami.
Indonesian visit buries blot of East Timor
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