Blair, then U.S. Pacific Command chief, pushed for renewing relations with the Indonesian army, reasoning that drawing it closer would give the U.S. more leverage. Obama spokeswoman Brooke Anderson said Blair was acting in accordance with U.S. policy.
"Admiral Blair condemned the conduct of Indonesian troops in East Timor, and he conveyed that if they behaved responsibly, the U.S. was prepared to resume normal relations. If they did not, they risked further negative consequences," she said.
The East Timor and Indonesia Action Network, a human rights group, called Blair a poor choice for intelligence director this week.
Ed McWilliams, who was political officer at the U.S. Embassy in Jakarta at the time and is now with the human rights group, told the AP "the matter raises the larger question of our cooperation with militaries and intelligence agencies which abuse human rights, are unaccountable before their own justice systems and not subordinate to civilian control."
But McWilliams credited Blair for trying to lead a human rights delegation to Indonesia's province of West Papua where terrible abuses were occurring. He and his delegation were blocked by security forces.
Panetta faced resistance from the Hill earlier this week because of his lack of intelligence experience, but his prospects for an easy confirmation improved this week as key senators, including incoming Intelligence Committee Chairman Dianne Feinstein, pledged their support after discussions with Obama, Panetta and Vice President-elect Joe Biden.
Associated Press writer Slobodan Lekic contributed to this report from Brussels.