Susilo's visit to the Santa Cruz cemetery on Saturday was another step towards reconciliation between Indonesia and the territory it occupied for a quarter of a century, before it opted for independence in a UN-sponsored vote.
The visit was the first by an Indonesian leader to the graveyard, and the clearest sign yet of the improving
ties between the two countries since East Timor broke away from Jakarta's 24-year rule.
In November 1991, Indonesian troops opened fire on hundreds of demonstrators who had gathered at the Santa Cruz cemetery to honour pro-independence activist Sebastiao Gomez, who was killed a week earlier by the Indonesian military.
More than 200 people were thought to be killed in the shooting, which prompted the United States to restrict arms sales to Indonesia and suspend the training of Indonesian soldiers.
A planned protest during Susilo's visit to the cemetery with East Timor Foreign Minister Jose Ramos-Horta did not materialise, and he was instead greeted warmly by about 100 East Timorese, some of whom shook his hand.
The Indonesian president then moved on to a nearby cemetery where Indonesian soldiers who died during the occupation were buried.
Speaking later after meeting with East Timor parliamentarians, Susilo described the tiny country as a "true friend" because, despite its own financial difficulties, it had donated $75,000 for victims of the 26 December tsunami that devastated northwestern Indonesia.
"A friend in need is a friend indeed. I thank all the people of Timor Leste for their attention during our time of distress," Susilo said.
"The two countries' relations are excellent"
Susilo Bambang Yudhoyono,
He later told a group of about 100 Indonesians living in East Timor he felt welcome in the half-island country, where he arrived on Friday for his first visit to Dili since taking office last year.
"I was touched because along the way the people greeted me with enthusiasm. Some people called out my name. This shows that the two countries' relations are excellent," Susilo said.
Indonesia withdrew from the territory in 1999 in a maelstrom of military-backed violence surrounding the UN independence vote. The United Nations alleged that at least 1400 people were murdered and whole towns were razed.
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 high-ranking Indonesians.
The UN has begun a review of the tribunal, but Dili and Jakarta say the move is unnecessary, preferring to focus on a South African-style truth and reconciliation commission to deal with the past.
Susilo (L) has signed a border
agreement with East Timor
On Friday, Susilo and East Timor Prime Minister Mari Alkatiri signed a border agreement clarifying 96% of their mutual frontier and removing one of the last obstacles to reconciliation.
Both countries have avoided addressing military-backed atrocities committed after Indonesia invaded the former Portuguese colony in 1975 and before it pulled out in 1999.