The US has said it is "profoundly
disappointed" that the convictions of four men over the violence in East Timor in 1999 have been overturned.
Maj Gen Adam Damiri's conviction has been overturned
Indonesia announced last week that a court had cleared the security officials of gross rights violations.
The US State Department said Jakarta's prosecutions process "was seriously flawed and lacked credibility."
But Indonesia complained such criticism was premature, since the judicial process is not yet over.
Indonesian Foreign Ministry spokesman Marty Natalegawa said prosecutors can still ask the Supreme Court to reassess the cases.
More than 1,000 people were killed in East Timor in the lead up to and after the former Indonesian province voted for independence.
Local militias blamed for the violence were alleged to have been acting with the complicity of sections of the Indonesian military.
Following international criticism of its handling of the crisis, Jakarta set up the special human rights court which heard cases against 18 people.
On Monday State Department spokesman Adam Ereli reacted to news of the convictions being overturned, saying: "We are dismayed by this decision, and we are profoundly
disappointed with the performance and record of the Indonesian ad
"In our view, as a result of this appeals decision, only two of
the 18 defendants have been convicted, and both individuals are
ethnic Timorese and received sentences below the 10-year minimum set
by law," he said.
The four cleared men include former regional military commander Major General Adam Damiri, who was last year found guilty of "gross human rights violations" and sentenced to three years in jail.
Human rights groups condemned the Indonesian tribunal from the beginning, calling it a sham meant to divert pressure for an international judicial process.
They protest that none of Indonesia's top military leaders has been tried.
"More than four years after this sham court was established, the question remains: when will the international community act?" said John Miller, from The East Timor Action Network.
"Real pressure and real trials are the only ways to end impunity."
The BBC's State Department correspondent, Jill McGivering, says many East Timorese are more focused on the immediate challenges they face since achieving full independence in 2002, including creating jobs and rebuilding the economy.
But this judicial process is doing little to help them to heal a bitter relationship with their large immediate neighbour and former ruler, she says.