President Reagan moved yesterday to ease nagging diplomatic and strategic strains with Indonesia, capping with the unusual announcement at a state dinner last night that Washington is finally in a position to name a new ambassador to Jakarta after a year of false starts.
With Indonesia's President and Mrs. Suharto looking on, Reagan announced that Assistant Secretary of State John H. Holdridge would be nominated to move from the top echelons of the State Department to the ambassadorship of the world's fifth most populous nation.
The United States has had no ambassador in Jakarta for a year, as a struggle continued behind the scenes to come up with the right name. Career diplomat Morton Abramowitz was rejected by Jakarta, reportedly after Indonesian officials received a copy of a damaging paper that had circulated in Washington to undercut Abramowitz's earlier nomination to be assistant secretary of state for East Asian affairs.
The name of Washington businessman Kent B. Crane then surfaced, but he was identified as a former CIA operative with close ties with the Suharto family, a likely point of controversy on Capitol Hill.
The nomination of Holdridge, 58, currently assistant secretary for East Asian and Pacific affairs, came as a surprise. There was no indication of who might succeed him at the State Department if the Senate confirms his nomination.
Earlier yesterday, after White House talks and a luncheon meeting with Secretary of State George P. Shultz, Indonesian Foreign Minister Mochtar Kusumaatmadja said he was satisfied with the U.S. explanation of its policy on increased armaments and defense responsibilities for Japan, another sensitive issue between Washington and Jakarta.
Just as Mochtar was preparing to respond to a question about Indonesia's actions on the island of East Timor, however, Holdridge took over the microphones in the State Department lobby to give the standard U.S. response on sensitive human rights issues.
"All subjects of importance to the two countries -- global, regional and bilateral -- were discussed," Hold-ridge said, adding that the Reagan administration prefers what it calls quiet diplomacy when it comes to rights matters.
Human rights concerns -- although not necessarily involving East Timor -- caused strains between the United States and Indonesia during the Carter administration, but Reagan has chosen to give precedence to strategic interests and has been less vocal publicly on rights issues except as regards the Soviet bloc.
Eighty-four members of Congress from both parties sent a letter last week urging Reagan to discuss the "tragic situation" in East Timor with Suharto.
East Timor, a Portuguese colony for 400 years, was invaded by Indonesia in 1975 and subsequently annexed. Since then, there have been numerous allegations of widespread jailings, disappearances, famine and thousands of deaths among the Timorese. Some estimates put the number of dead at up to 200,000, but confirmation of this has been difficult to obtain because Indonesia has restricted access to the island.
During recent congressional testimony, Holdridge stressed that over the past several months conditions on East Timor had improved, and he indicated that allegations of renewed famine there appear unfounded.
While problems on the human rights front have been more a creation of congressional and special-interest concerns, unease over U.S. defense policy among Southeast Asian states is directly tied to administration proposals.
Indonesia and the Philippines, both of which harbor bitter memories of Japan from World War II, have expressed alarm at Tokyo's taking responsibility for defense of sea lanes in large areas of the northern Pacific as part of a U.S. move to free more of the Pacific Fleet for duty in the Indian Ocean and the Persian Gulf.
"We registered our view that we differentiate between increased expectations for Japan in its immediate vicinity but we would be very concerned if it were extended farther south," Mochtar said. ". . . Some assurances have been given that in any relations involving Japan and China our interests would be taken care of."
Administration spokesmen say Japan has agreed to take responsibility for sea defense up to 1,000 nautical miles from Tokyo Bay, well short of Philippine and Indonesian waters. If measured from Okinawa, the 1,000 miles would carry well into Southeast Asian waters.
Japanese defense officials have been evasive on the subject, saying only that the 1,000 miles is a "rough gauge" of what Washington would like Japan to do, according to Washington Post foreign correspondent Tracy Dahlby.
Reagan and Suharto met alone and with senior aides for more than an hour yesterday morning after a colorful South Lawn welcoming ceremony at which Reagan praised his guest as "a senior statesman of Asia."
As he did on last month's visit by Philippines President Ferdinand Marcos, Reagan praised the role of the Association of Southeast Asian Nations -- the grouping of non-communist countries of the region -- and gave assurances that its interests would be protected.
"As we pursue our overall policy in Asia and the Pacific, we will never lose sight of ASEAN's concerns, or neglect our commitments to the ASEAN countries," Reagan said, in apparent reference to U.S. initiatives with China and Japan.
Suharto said the "political and economic map of the world has un-dergone great changes" since his last U.S. visit seven years ago, and spoke of a "common responsibility" to overcome "successive upheavals" of recent years.
With a population of almost 150 million on an archipelago of 13,700 islands stretching across strategic Pacific sea lanes, Indonesia has begun to speak in recent years of increased military responsibilities.
The United States currently supplies about $40 million in military assistance to Indonesia, and negotiations are under way for the sale of advanced air and naval equipment.
The United States also has pledged $100 million in non-military assistance for the coming year through the international aid consortium for Indonesia.
Suharto completes his Washington stay this morning with a meeting of the local Indonesian community.