Indonesia rolled out the red carpet for the man it once jailed as a subversive as Xanana Gusmao arrived in the capital for his first visit as president of newly independent East Timor.
A smiling Gusmao was garlanded and given a 21-gun salute and honour guard on arrival Tuesday at the palace for talks with President Megawati Sukarnoputri.
Gusmao and Megawati, flanked by their spouses Kirsty Sword-Gusmao and Taufik Kiemas, stood at attention for the two national anthems before inspecting a guard of honour dressed in red and white ceremonial uniforms.
Gusmao, a former guerrilla chief jailed for seven years by Jakarta, bowed deeply to the two national flags, which also lined the main street in front of the palace. Portraits of the two leaders were erected at a busy intersection.
The two then began talks as their delegations held a separate meeting.
A joint communique on diplomatic relations was due to be signed by East Timor's Foreign Minister Jose Ramos-Horta and his Indonesian counterpart Hassan Wirayuda.
East Timor became independent on May 20 after 24 years of often brutal Indonesian occupation and 32 months under UN stewardship.
Among contentious issues to be discussed will be Jakarta's compensation claim for assets left behind in the territory. East Timor rejects the claim, saying both sides should wipe the slate clean after the suffering which its people endured under Indonesia's rule.
Gusmao is accompanied by five ministers as well as his wife and baby son, Alexander. He is scheduled to meet top security minister Susilo Bambang Yudhoyono and Foreign Minister Hassan Wirayuda Tuesday afternoon and attend a state banquet.
On Wednesday Gusmao will lay a wreath at the "Heroes' Cemetery" and meet the heads of the two legislatures, Amien Rais and Akbar Tanjung. He leaves Wednesday afternoon for Makassar in Sulawesi, where he will Thursday address a seminar on prospects for economic cooperation between eastern Indonesia and East Timor.
Gusmao, who has laid stress on reconciliation, had planned to make his first trip as president to Indonesia in May to symbolise a new era in relations. But Jakarta postponed the visit due to what it described as a scheduling problem and the East Timorese leader has since visited South Korea and Australia.
Indonesia invaded East Timor in 1975 and ruled it until 1999, when the transitional United Nations administration took over. Pro-Jakarta local militiamen, backed by Indonesian military elements, waged a campaign of intimidation before the territory's August 1999 independence vote and a violent revenge campaign afterwards.
At least 1,000 people were killed and more than 250,000 East Timorese either fled or were forced across the border into Indonesian West Timor. Fewer than 50,000 are still in Indonesia.
In June a delegation from Jakarta visited the new state for talks on the assets claim and other issues. They agreed to form a joint committee to look into the issue. Indonesia spent millions of dollars on infrastructure during its rule, which also cost at least 100,000 East Timorese lives.