President Francois Hollande has acknowledged the brutality of France's colonisation of Algeria, but stopped short of a full apology.
Speaking on his first visit to the country as president, Mr Hollande told the Algerian parliament: "I recognise the suffering that colonialism inflicted on the Algerian people."
But he added that he had not come "to repent or apologise".
Thousands of Algerians were killed in a bloody seven-year war of independence.
The French army has been accused of carrying out massacres and using torture as it sought to quash the pro-independence movement.
Many French people also died in revenge attacks before Algeria gained independence in 1962.
Mr Hollande said there was a duty of truth to recognise the injustices. But he said his visit opened a new era of a partnership between equals.
Mr Hollande's predecessor, Nicolas Sarkozy, also acknowledged that France's 132-year colonial rule was unjust on his first visit to the country five years ago.
But he, too, would not apologise.
Ahead of his visit, 10 Algerian political parties called on Mr Hollande "to recognise, apologise for and compensate" for France's crimes.
The popular El Watan newspaper said such an act would "soothe memories that are still painful".
Mr Hollande, however, would only go as far as recognising that the full truth about the war should come out.
In his speech to mark 50 years of independence, he said: "Establishing the truth is an obligation that ties Algerians and French."
"That's why it is necessary that historians have access to the archives."
The BBC's Christian Fraser in Paris says many of Algeria's youthful population no longer see France as the enemy - but they do want to be treated as equals.
About 700,000 Algerians live in France and Mr Hollande is keen to make it easier for Algerians and French to travel between the two countries.
He is also eager to boost trade, which stands at about 10bn euros a year (£8bn, $13bn).
China, Italy and other countries are increasingly muscling in on trade with the former French territory.
Travelling with Mr Hollande are executives from some of France's top firms.
Renault has announced it is to build a factory in Algeria, which will produce 75,000 cars each year. It is the first carmaker to establish production facilities in the country.
Mr Hollande has also invited Algerian President Abdelaziz Bouteflika to pay a state visit to France.
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