The co-founder of a Papuan rebel group fighting to split from Indonesia has called for a peaceful settlement to the conflict after returning from more than 40 years in exile in the Netherlands.

Nicholas Jouwe, the 85-year-old co-founder of the Free Papua Movement, or OPM, made the call for peace in a meeting with Indonesian Welfare Minister Aburizal Bakrie.

He says the world is getting smaller and Papua and Indonesia should forge closer ties because he believes it's better to work together rather than be at war.

Mr Jouwe, the creator of Papua's banned Morning Star independence flag, refused to say if he would drop support for OPM's goal of independence for Papua.

Mr Bakrie says he hopes the visit will pave the way for dialogue between the government and Papuans.

He says he hopes Mr Jouwe can help to foster reconciliation and progress in a peaceful manner.