Jakarta – The United States said it was working towards a closer relationship with Indonesia, the world's largest Islamic nation, despite past strains between the two countries.

US ambassador to Jakarta Lynn Pascoe said it was vital for the world's third and fourth most populous nations to have a "perfectly normal" relationship.

Indonesia and the United States resumed full military ties in November after they were severed over human rights abuses by Indonesia's military in 1991.

"It would be very unusual and very strange that we don't have good relationships and it's because of that we are trying to make sure that relationship is... perfectly normal and working closely," Pascoe said.

Pascoe was speaking after a ceremony in Jakarta which saw Washington hand over 11 million dollars worth of medical equipment to be used as a fleet hospital by the Indonesian navy.

The aid – which will provide the equal of a full-scale US military hospital – was "designed to get at that sort of normal working relationship and particularly, in this instance, in the humanitarian field," Pascoe said.

The handover was the first major military exchange between the two countries since the resumption of military ties and follows Indonesia's close cooperation with the United States over its "war on terror".

"We see this as very much part of that kind of close working relationship that we would like to do, a very normal relationship," the ambassador said, who attended the ceremony with Indonesia's defense minister Juwono Sudarsono.

Sudarsono said the grant "marks focus by the United States" on the Indonesian military's ability to provide relief in disaster-prone areas. Sudarsono also reiterated Indonesia's intention to buy more US-made Hercules planes to boost its own capacity to provide such emergency relief.

Washington lifted a foreign military financing ban on Indonesia last November in a move described by Indonesia's President Susilo Bambang Yudhoyono as a "new chapter" in strategic relations between the two countries.

The lifting of the ban followed the resumption of US international military education and training and foreign military sales to Indonesia in February and in May last year.

US military dealings with Indonesia were first restricted in 1991 when Jakarta's forces launched a bloody crackdown on pro-independence protesters in East Timor. Sanctions were further tightened after a new wave of violence there in 1999.