Media Indonesia newspaper quoted Hassan Wirajuda, Indonesia's foreign minister, as saying on Tuesday that Mahmoud Ahmadinejad's visit "will be the first opportunity for us to hear directly about Iran's response to the solutions that have been proposed" on the nuclear issue.
Iran is under pressure to curb a nuclear programme it says is for peaceful purposes but which the West sees as a potential weapons threat.
The US has pushed for international action on the issue, and with a group of nations including China and Russia has authorised Britain, France and Germany to work on a package to entice Iran to change its programme.
Wirajuda, asked if Iran's nuclear programme would be raised in bilateral talks, said: "Certainly it will be discussed, it's an important issue."
That includes a letter written by Ahmadjinejad to the US president, he said.
George Bush received the 18-page letter on Monday, the first publicly announced personal communication from an Iranian president to a US counterpart since the 1979 Islamic revolution. Washington has dismissed it as a step to divert attention from the nuclear issue.
Wirajuda said: "We support the development of nuclear programmes for peaceful purposes. This is the sovereign right of every nation. But we have been consistently against the proliferation of nuclear weapons."
The prime purpose of Ahmadinejad's visit is supposed to be the development of economic ties.
Iran is investing several billion dollars in the oil and gas sector of Indonesia, a fellow Opec member, and both countries want to increase trade.
Tight security will accompany a
meeting of leaders in Bali
Indonesia's government, walking a tightrope between friendship with the West and a political need not to offend the country's overwhelming Muslim majority, is unlikely to push Ahmadinejad very hard on the nuclear issue.
On Wednesday, Ahmadinejad received a 21-gun salute and reviewed a military honour guard in Jakarta, the capital city.
Ahmadinejad stood next to Susilo Bambang Yudhoyono, Indonesia's president, on a reviewing stand in the grounds of the presidential palace as their national anthems were played.
Later in the day, Ahmadinejad is due to meet Indonesia's vice-president, and in the evening will attend a state dinner.
His Jakarta itinerary on Thursday and Friday includes meetings with parliamentarians, businessmen and Muslim leaders.
Several agreements are expected to be signed, including a deal to develop an oil refinery on Java island worth up to $5 billion that will largely cater to China.
Yudhoyono will be present at the
signing of several deals with Iran
The refinery, due to come online in 2010, will have a capacity of 300,000 barrels of oil a day.
On Friday afternoon, Ahmadinejad is due to fly to Bali for a meeting of the Developing Eight group that also includes Indonesia, Nigeria, Malaysia, Egypt, Turkey, Pakistan and Bangladesh.
Economic development, including peaceful uses of nuclear energy, figure high on the agenda for the meeting, which will end on Saturday.