Sian Powell, Jakarta – good relations with Indonesia have always been of prime importance to the independent nation of East Timor.

The half-island of one million people is surrounded on three sides by giant Indonesia, a sprawling archipelago with a population of 230million.

East Timorese leaders have found it politic to stay more or less silent on the horrors of the bloody years of occupation.

President Xanana Gusmao, a one-time resistance hero, has fostered amity with Indonesia, even publicly hugging the former head of the Indonesian armed forces, General Wiranto.

Just this month there were reports that Mr Gusmao had invited the notorious militia leader Eurico Gutteres back to East Timor, reports hastily denied after an uproar.

Yet on a broader scale, relations are still brittle. Most Indonesians believe a rigged UN ballot in 1999 stole East Timor from them, along with all the valuable Indonesian investment in infrastructure there. They regard the East Timorese as a thankless and benighted mob. Many East Timorese fear and resent Indonesians – most have lost someone to Indonesian violence or neglect.

So the Commission for Reception, Truth and Reconciliation report is a grenade tossed into a flammable international arena.

The Indonesian Government will probably try to ignore the report, even though Mr Gusmao has said he will personally travel to Jakarta to give a copy to Indonesian President Susilo Bambang Yudhoyono.

East Timor will do its best to smooth over the damage to its friendship with Indonesia. Mr Gusmao is required by law to present the report to UN Secretary-General Kofi Annan, but he has obviously been reluctant to release it publicly.

He has repeatedly made it clear the future matters more than seeking retribution for the past – and he carefully downplayed the commission's report in a speech to parliament.

"The grandiose idealism that they (the commissioners) possess is well manifested to the point that it goes beyond conventional political boundaries," he said. And in an obvious reference to Indonesia, he added: "The report says the 'absence of justice... is a fundamental obstacle in the process of building a democratic society'. My reply to that would be 'not necessarily'."