But he stopped short of a full apology to the Timorese people who, the report found, were subjected to a systematic campaign of violence and gross human-rights abuses in the run-up to their 1999 vote to gain independence from Indonesia.
Army commanders, it says, gave weapons, funding and operational help to the militias in a highly organised way, systematically targeting pro-independence supporters in a campaign of violence for which Indonesia's army, police and civilian administration were all responsible.
Until now, Indonesia's official position had been that the human rights abuses committed in East Timor in 1999 were isolated incidents - the random acts of individuals.
There are also things in this report which will be difficult for many in East Timor to accept, says the BBC's Lucy Williamson in Bali.
For example, it finds that gross human rights violations were also committed by pro-independence groups - though far fewer and less serious.
Violence taking place in East Timor in 1999.
Also in question are what both nations will do with the findings of the report.
Their leaders have urged them to move on, but the report could bolster demands that individuals stand trial - though it does not name them itself.
But neither leader appears to have an appetite for this.
"Justice is not and cannot be only prosecutorial in the sense of sending people to jail. Justice must also be restorative," Mr Ramos-Horta was quoted as saying on Tuesday.
"We as leaders of our people must lead our nations forward."
Analysts say East Timor's leaders are trying to tackle widespread poverty, social unrest and army rebellions - and are unlikely to want to upset relations with Indonesia, their powerful neighbour and largest trading partner.
But rights groups have said they will push for the prosecution of retired General Wiranto, the former Indonesian military chief planning to make a second run at Indonesia's presidency in next year's elections.
He was indicted by UN prosecutors in 2003 for crimes against humanity for his alleged role in the violence, but denies any wrongdoing.
East Timor voted for independence after 24 years of Indonesian occupation.
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