It may not have quite the power of the image of Nelson Mandela applauding his former jailer, F.W. de Klerk, when the two were awarded the Nobel peace prize in 1993, but yesterday's beaming photo in The Australian of East Timorese President Xanana Gusmao and Indonesian presidential candidate General Wiranto was a stunner.

As the leader of Fretilin during the Indonesian occupation, Mr Gusmao spent more than six years in Indonesian jails and under house arrest. As the former commander of Indonesia's armed forces, General Wiranto bears direct chain-of-command responsibility for the bloody rampage in Dili that cost 1500 civilian lives after the 1999 independence referendum.

While the photo is a powerful image of reconciliation, it is also a symbol of the pragmatism of East Timor's leadership. In a country where 41 per cent of the population lives below the poverty line, there are more urgent issues than settling old scores.

That does not mean there is any question of forgiving and forgetting the slaughter, rape and robbery that Indonesian forces carried out in 1999.

The UN-funded Serious Crimes Unit has indicted 369 people for those crimes, including General Wiranto himself. But ever since the warrant for Wiranto was issued, senior East Timorese officials, including Mr Gusmao and Foreign Minister Jose Ramos Horta, have been playing down the possibility it will be carried out.

Wiranto is the chosen candidate of Golkar, the old Suharto political machine, in the Indonesian presidential elections due to begin in less than five weeks. The last thing East Timor, with its population of less than a million, needs is to make a lasting enemy of the 220-million-strong nation that sprawls to its east, west and north. It is realism that dictates Mr Gusmao's smile, even through gritted teeth.