GUATEMALA CITY – By releasing $3.2 million in aid, America is rewarding Guatemala for its progress in overhauling a military once blamed for human rights abuses.

Defense Secretary Rumsfeld announced the decision yesterday after meeting with Guatemala’s president, Oscar Berger. Since the mid-1990s, America has provided Guatemala a relative pittance, with only $350,000 approved for tightly controlled purposes, such as maintaining America-Guatemala contacts in 2005.

The Bush administration is proposing to increase the amount to $900,000 in 2006. The money is intended for uses such as assisting in training and the modernization of Guatemala’s armed forces.

Mr. Berger, appearing with Mr. Rumsfeld at a news conference in the Guatemalan capital, said the human rights abuses committed by his country’s military are a thing of the past.

“The shadows that plagued our army have disappeared,” Mr. Berger said through a translator.

Mr. Rumsfeld, saying Central America has reached a “magic moment,” said he was satisfied that Guatemala’s military was developing toward a force that could assist in peacekeeping operations and cooperate with other militaries in the region.

“I’ve been impressed by the reforms that have been undertaken in the armed forces,” he said. “I know it is a difficult thing to do but it’s been done with professionalism and transparency.”

Still, the amount of money being provided to Guatemala is less than the millions provided overtly and by the CIA to support repressive right-wing governments in Central America in their wars against leftist guerillas during the past half-century.

In Guatemala, at least 120,000 people disappeared before a peace accord was signed in 1996, 36 years after the civil war began.

Under Mr. Berger’s administration, the Guatemalan military has decreased in size from 27,000 to 15,000, and is transforming its forces for cooperative peacekeeping missions instead of internal counter-guerilla warfare. Mr. Berger also has altered some of the laws governing the military and changed the chain of command.

While the Guatemalan government welcomed the move by America, officials said they will still push for a lifting of the general embargo against American military aid to Guatemala. Congress either would have to waive or eliminate that embargo before additional aid could be provided.

“I’m pleased that the United States has been able to release the $3.2 million in military assistance,” the defense minister, Carlos Aldana, said.

Mr. Berger said America’s ambassador, John Hamilton, has been working with Congress on lifting the embargo. Mr. Rumsfeld said it was an issue for the State Department, not the Pentagon.

One sign of Guatemala’s improved standing, from the American perspective, has been the country’s contribution of peacekeepers to the mission in Haiti. Mr. Rumsfeld has pushed for more security cooperation between Central American nations despite their history of squabbles and internal strife. Guatemalans have also taken part in several U.N. operations in Africa.

During the 1980s, overt U.S. military aid totaled about $30 million, less than that supplied to the governments of El Salvador and Honduras, which fought similar conflicts.

But the killing of an American innkeeper in 1990 and the subsequent cover-up led Washington to cut off that aid, though millions more kept flowing secretly from the CIA to Guatemala’s military commanders until 1995.

The American government has provided only a small amount of security money, some for counter narcotics assistance, to Guatemala. Economic aid, however, has exceeded $100 million a year.

Guatemalans have had continued problems with crime and drug-trafficking. According to the federal attorney general’s office, violent crime killed 8,120 people in 2001 and 8,767 in 2002. Some estimates provided by American officials suggest that 80% of cocaine intended for America passes through Guatemala or its territorial waters.