Mr Ramos Horta, who shared the 1996 peace prize with East Timor's Catholic bishop, Carlos Belo, said he found Indonesia a changed place. "I am very happy to be in the new democratic Indonesia," he said.
The authorities had branded him a criminal for accusing former President Suharto's troops of atrocities and genocide.
The East Timorese campaigner was allowed into the country to join peace talks in the capital between rival Timorese factions, some of whom want the territory to remain under Jakarta's rule.
A referendum is due to take place in August when the territory's 800,000 population will vote on proposals for autonomy within Indonesia.
If they vote against, Indonesia's President B.J. Habibie has said Jakarta will permit the former Portuguese colony to become independent.
"There is goodwill in Indonesia," Mr Ramos Horta said. "President Habibie has made a historic decision for the people of East Timor to decide their future. This new and democratic Indonesia cannot do anything but honour the democratic decision of the East Timorese."
Mr Ramos Horta, 49, helped form an independent government after the Portuguese abruptly pulled out in 1974. He fled just three days before Indonesia's forces invaded in 1975. At least 200,000 people were killed or died of starvation after the Indonesian take-over.
Fighting between pro-independence forces and loyalists, who have been armed by the Indonesian military, has claimed at least 34 lives in the past two months. Scores of people have been killed since the start of the year, most by pro-Indonesia paramilitary groups.
Earlier this week, UN Secretary-General Kofi Annan postponed the autonomy referendum, originally scheduled for 8 August, for at least two weeks as a result of the violence. There were fears that the orchestrated bloodshed might lead to the vote being put on hold for ever.
However Jamsheed Marker, a UN envoy in East Timor's capital, Dili, yesterday said the violence seemed to have eased and there was no reason for further delay.
The jailed East Timor resistance leader, Xanana Gusmao, and Joao da Silva Tavares, leader of the pro-Jakarta militias in the territory, are among those taking part in the Jakarta talks.
In Singapore, before boarding the flight to Jakarta, Mr Ramos Horta said as long as the vote was fair he would accept the result, even if it rejected independence. But he made no secret of what he thought would be the outcome.
"It is clear that the overwhelming majority of the people would vote for independence," he said.Reuse content