Obama, Castro Declare Historic Breakthrough in Ties

The United States and Cuba brought their bitter Cold War stand-off towards a historic close Wednesday, agreeing to revive diplomatic ties and to ease a five-decade U.S. trade embargo.

In the wake of a prisoner exchange, President Barack Obama said Washington is ready to review trade ties and to re-open its embassy in communist Cuba, which has been closed since 1961.

"We are all Americans," Obama declared, breaking into Spanish for a speech which the White House portrayed as a bid to reassert U.S. leadership in the Western Hemisphere.

Cuba's President Raul Castro, in a simultaneous address in Havana, confirmed that the former enemies had "agreed to re-establish diplomatic ties" after more than half a century of rancor.

"President Obama's decision deserves the respect and acknowledgement of our people," Castro said, while warning that the embargo -- which he calls a "blockade" -- must still be lifted.

In Washington, Obama admitted the U.S. trade ban had failed and said he would approach Congress to discuss lifting it, alongside the advances in diplomatic and travel links.

"We will end an outdated approach that for decades has failed to advance our interests and instead we will begin to normalize relations between our two countries," Obama said. 

"Through these changes, we intend to create more opportunities for the American and Cuban people and begin a new chapter among the nations of the Americas."

Chile's Foreign Minister Heraldo Munoz spoke for those in Latin America who are frustrated by the diplomatic divide, declaring: "This is the beginning of the end of the Cold War in the Americas."

Obama and Castro hailed the help given by Pope Francis, the first Latin American pontiff, and the Catholic Church in brokering better relations between the long-time enemies.

In response, the Vatican renewed its support for dialogue and said the pope warmly congratulated both governments for overcoming "the difficulties which have marked their recent history." 

Canada was also praised for hosting talks between the sides.

The breakthrough came after Havana released jailed U.S. contractor Alan Gross and a Cuban who spied for Washington and had been held for 20 years -- one of the most important U.S. agents in Cuba.

The United States in turn released three Cuban spies, and Obama said he had instructed the U.S. State Department to re-examine its designation of Cuba as a state sponsor of terrorism.

The United States imposed a trade embargo against Cuba -- the Cold War foe closest to its shores -- in 1960 and the two countries have not had diplomatic relations since 1961.

The ensuing stand-off was marked by incidents that threatened to turn the Cold War hot. 

CIA-backed Cuban exiles suffered a bloody defeat in the Bay of Pigs invasion and during the 1962 "Missile Crisis," U.S. warships blockaded the island to prevent the delivery of Soviet nuclear arms. 

The embargo hurt the Caribbean island state's economy, but it failed to unseat the communist governments led by the Castro brothers.

Obama now has only two years left in office, Cuba's revolutionary leader Fidel Castro is 88 and ailing and his brother Raul is 83. 

With their window for action closing, both sides were under pressure to make a gesture.

Senior Democratic lawmaker Dick Durbin, a member of the Senate foreign relations committee, hailed the move.

"Opening the door with Cuba for trade, travel and the exchange of ideas will create a force for positive change in Cuba that more than 50 years of our current policy of exclusion could not," he said.

But Republican Cuban-American Senator Marco Rubio, a champion of anti-Castro exiles, denounced the deal and said he would block any attempt to appoint a US ambassador to Cuba. 

"The White House has conceded everything and gained little," Rubio said, in a foretaste of the resistance that Obama will face as he tries to persuade Congress to back a full end to the embargo. 

Republican House leader John Boehner denounced the deal as "another in a long line of mindless concessions to a dictatorship that brutalizes its people and schemes with our enemies."

Castro urged Obama to work around Congress, saying: "Though the blockade has been codified into law, the President of the United States has the executive authority to modify its implementation."

The 65-year-old Gross, who had been held for five years for spying, was welcomed back onto U.S. soil at an airbase outside Washington by Secretary of State John Kerry.

Gross paid tribute to the "kind, generous and talented" Cuban people, who he said had suffered because of the rival governments' "mutually belligerent policies." 

And he welcomed the new spirit of dialogue, saying: "In all seriousness, this is a game-changer, which I fully support."

For his part, Kerry said: "I look forward to being the first Secretary of State in 60 years to visit Cuba." And White House spokesman Josh Earnest said Obama himself "would not rule out" a visit.

Also returning was an unnamed intelligence agent who had caught working for the US in Cuba and held for two decades.

Obama called the Cuban one of the United States' most important agents on the island and said: "This man is now safely on our shores."

In exchange for this prisoner, the United States released three Cuban agents, who were welcomed as heroes in the homeland.

Gross was arrested in 2009 for distributing communications equipment to members of Cuba's Jewish community while working as a contractor for the U.S. Agency for International Development.