The move will allow the sale of non-lethal items such as transport vehicles and communications equipment.

It is a reward for Indonesian President Susilo Bambang Yudhoy-ono, who is currently visiting Washington.

But rights groups attacked the move, saying that despite efforts to make Indonesia's military more accountable, its rights record was unsatisfactory.

The partial lifting of the arms embargo is a reward for the improvements Indonesia has made in curbing the abuses of its military.

But by maintaining the block on the sale of weapons, Washington has retained the ability to keep up pressure for more reform.

The embargo was initially imposed in 1992 after the army killed more than 200 protesters in East Timor. It was tightened seven years later when the military imposed a reign of terror in an unsuccessful attempt to prevent East Timor's people voting to split from Indonesia.