"Is it true?"
Er, we can't possibly know, but presumably you can take employer at their word as to what the policy is.
"Can an employer be sued for defamation if giving a negative reference . . . even if it's true?"
Can they? Sure. But if what they are saying is true, the lawsuit won't get too far.
"Instead, many employers give only the most basic facts regarding former employees, fearing that any qualification or additional facts, other than dates of employment, title and perhaps compensation, however truthful, will result in a defamation claim."
That's their choice, but it's not necessary.
"Can a former employee alledge that things stated in a reference are untrue and therefore at least attempt to sue for defamation?"
Sure but, again, unless they can prove the untruths and that the untruths have damaged them, the lawsuit won't get far.