Indonesian President Susilo Bambang Yudhoyono and his East Timorese counterpart are to meet this week to discuss a sensitive atrocities report.
Mr Gusmao (left) gave the sensitive report to the UN in January
Mr Yudhoyono and Xanana Gusmao will discuss allegations of abuse by Jakarta during its 24-year rule of East Timor.
The leaders were due to have held talks last month, but Jakarta cancelled the meeting after Mr Gusmao presented the report's findings to the UN.
The report holds Indonesia responsible for the deaths of up to 180,000 people.
It also chronicles abuses including rape, torture and deliberate starvation, as well as the use of napalm.
Indonesia's army chief is among a number of senior officials in Jakarta who have rejected the accusations.
The two leaders will meet on Friday on the resort island of Bali, Indonesian Foreign Minister Hassan Wirajuda said.
Mr Yudhoyono will "ask for clarification" as to why Mr Gusmao presented the report to the UN, he told the Associated Press.
1975: Indonesia invades after colonial power Portugal withdraws
Indonesia's often brutal rule opposed by Fretilin fighters
1999: More than 1,000 people killed over independence referendum
2002: East Timor becomes independent nation
The report - by East Timor's Commission for Reception, Truth and Reconciliation - is not yet public, but was leaked through Timorese politicians and was presented to UN Secretary General Kofi Annan in January.
The 2,500-page report documents a catalogue of abuses allegedly committed by Indonesian security forces, based on the testimony of thousands of witnesses.
It says Indonesia's policy of deliberate starvation could have cost the lives of between 84,000 and 183,000 people between 1975 and 1999, and that the military used napalm bombs during its occupation of East Timor.
The BBC's Rachel Harvey, in Jakarta, says Mr Gusmao has tried hard to play down the report, as there is no appetite in either country to pursue those ultimately responsible for the violence.
Impoverished East Timor is still heavily dependent on Indonesia.