The United States' decision to restore military ties with Indonesia does more than draw a line under past human rights abuses in East Timor. It brings Indonesia's armed forces in from the cold after decades of embargoes and bans by Western governments.

Whether the Indonesian military has been sufficiently reformed to deserve such recognition is questionable. But the former authoritarian Indonesian president Soeharto is gone and East Timor is an independent nation.

For Washington, human rights is no longer the most pressing issue. The US wants to reward Indonesia's co-operation in the war on terrorism and so influence Jakarta's handling of the Jemaah Islamiah terrorist group.

Australia's national interest, as a target of the group's attacks, also clearly lies in assisting Indonesia's security forces to disrupt terrorist cells.

The US decision confirms no senior Indonesian military officer will ever be held accountable for the carnage which followed East Timor's independence vote in 1999. Human rights groups immediately accused the US of betraying East Timorese victims "with a stroke of a pen".

Up to a quarter of East Timor's population – about 200,000 people – died during 24 years of Indonesian rule. But the pragmatic decision to bury the pain of the past rather than seek retribution was made in Dili, not in Washington. East Timor's President, the former guerilla leader Xanana Gusmao, last year publicly reconciled with the Indonesian President, Susilo Bambang Yudhoyono.

Indonesia is now a democracy and, it may be argued, should not be isolated because of the sins of its authoritarian past – though admittedly many Soeharto-era officers still hold senior positions. The Yudhoyono Government has achieved significant structural reform. The military was stripped of its formal political role last year after four decades. It is also on notice that its right to do business – it controls large shares in lucrative industries such as logging – is coming to an end.

The best way to support Indonesia's reforms is through re-engagement. US aid, training and equipment can help. Enhanced Australian ties should follow.