State Department spokesman Sean McCormack said Washington planned "to provide assistance for specific military programs and units that will help modernize the Indonesian military."

He said resumption of Foreign Military Financing, suspended with other aid over human rights and other concerns, would help boost anti-terrorism efforts, maritime security and disaster relief.

McCormack did not give any further details and officials said no dollar amount had yet been determined for the FMF program, which provides outright grants for the purchase of materiel.

The announcement followed moves earlier this year by US Secretary of State Condoleezza Rice to renew military ties with the world's most populous Muslim nation, which helps guard strategic Asian sea lanes.

"It continues the process of military reengagement with Indonesia that included the secretary's decision to resume International Military Education and Training (IMET) in February, and her decision to resume non-lethal Foreign Military Sales (FMS) in May," McCormack said.

The move was also in line with the agreement by US President George W. Bush and his Indonesian counterpart Susilo Bambang Yudhoyono at a White House summit in May to work for normal defense relations.

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

The United States had also made it clear that full normalization of military relations was contingent on the Indonesian authorities' efforts to solve the killing of two American teachers in 2002.

But in January, Washington allowed commercial sales of nonlethal defense items to Indonesia, particularly spare parts for transport planes needed for relief operations after the killer tsunami that hit in December 2004.

Washington then decided to restore the IMET training program and later marked the May summit by lifting a ban on the government's sale of non-lethal defense equipment to Indonesia.

McCormack said Tuesday the Americans attached "the utmost importance" to their ties to Indonesia and the decision on foreign military financing was made "in the national security interests of the United States."

The spokesman said Jakarta had "made significant progress in advancing its democratic institutions and practices in a relatively short time."

But he added, "The US remains committed to pressing for accountability for past human rights abuses, and US assistance will continue to be guided by Indonesia's progress on democratic reform and accountability."

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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