Denpasar – The leaders of Indonesia and East Timor launched a truth commission into the violence that marred the push for independence in what is now the world's youngest nation.

Indonesian President Susilo Bambang Yudhoyono, a former army general, and the Timorese ex-guerrilla fighter Xanana Gusmao witnessed the signing of documents appointing the 10 members of the Commission for Truth and Friendship.

The ceremony took place at the governor's office in Bali, the resort island halfway between Jakarta and East Timor.

Indonesian Foreign Minister Hasan Wirayuda signed on behalf of his government while East Timor was represented by Vice Foreign Minister Antoninho Bianco.

"This is a historical moment in the bilateral relationship between Indonesia and Timor Leste," Gusmao said in his speech.

He said setting up the commission was "a creative step forward between the two states about not-so-pleasant history." Yudhoyono said it was "a sign of maturity in the relations between our two countries." "We need to find a closure to the tragic events that happened in East Timor after the popular consultation in 1999," he said.

The commission convened in Bali last week to prepare for operations, but Thursday's ceremony was its official launch.

Modelled along lines similar to South Africa's post-apartheid Truth and Reconciliation Commission, the body aims at reconciliation rather than recrimination over deadly violence by pro-Jakarta militias during East Timor's 1999 drive for independence.

Yudhoyono told journalists after the ceremony that the commission was seeking truth rather than justice.

"Justice is not the framework of this commission. We are the one with the problems and we will settle this with the future in view," he said.

Gusmao said both leaders were convinced that the establishment of the body was "a credible decision," adding it was not prompted by realpolitik.

"We will live side by side forever and therefore we need friendship and cooperation in the future," Yudhoyono said.

The commission plans to hold talks with former East Timorese rebel leaders, Indonesian top military brass and their former militia supporters.

Benyamin Mangkudilaga, the Indonesian chairman of the commission, has said the body had a tough job ahead and likened his task of dealing with the former foes to that of a peacemaker.

Militia gangs, which the United Nations has said were recruited and directed by Indonesia's military, went on an arson and killing spree before and after the East Timorese voted for independence in a UN-sponsored ballot in August 1999.

They killed about 1,400 independence supporters and laid waste to much of the infrastructure in the half-island what was a Portuguese colony before Indonesia annexed and invaded it in the mid-1970s.

An Indonesian tribunal set up to try military officers and officials for atrocities in East Timor has drawn international criticism for failing to jail any Indonesians.

The Roman Catholic church in East Timor, which is overwhelmingly Catholic, has also expressed outrage over Dili's move to drop trials for militia atrocities.

The neighbours, however, have rejected prosecutions, in favour of looking toward the future between tiny East Timor and the population giant Indonesia.

The commission's task was to unveil the truth behind human rights violations but would not prosecute anyone, Wirayuda has said.

East Timor gained full independence in May 2002 after more than two years of UN stewardship.