US, Cuba restore ties after 50 years

The United States and Cuba moved to end five decades of Cold War hostility Wednesday, agreeing to revive diplomatic ties in a breakthrough that would also ease a crippling US trade embargo.

In the wake of a prisoner exchange, President Barack Obama said Washington was ready for a "new chapter" in relations with communist Cuba and would re-establish its embassy in Havana, shuttered since 1961.

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

Cuba's President Raul Castro, speaking at the same time in Havana, confirmed that the former enemies had "agreed to re-establish diplomatic ties" after a half 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 US trade ban had failed and said he would urge Congress to lift it, while using his presidential authority to advance 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"We will end an outdated approach that for decades has failed to advance our interests and instead we will begin to normalize relations between our two countries," Obama said.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."

Obama later raised the hitherto unthinkable prospect of a US president embarking on a visit to Cuba, saying nothing was ruled out.

"I don't have any current plans, but let's see how things evolve," Obama told ABC's "World News Tonight" in an exclusive interview.

Alan Gross talks with President Barack Obama onboard a government plane headed back to the US in this December 17, 2014 White House handout photo. (Reuters)

'Outdated approach'

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

Havana also agreed to release dozens of political prisoners, a senior US official said.

The United States in turn freed three Cuban spies, and Obama said he had instructed the US 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 full diplomatic relations since 1961.

The ensuing stand-off was marked by incidents that threatened to send the Cold War to boiling point.

Alan Gross (centre) hugs Patrick Leahy, (D-VT), while Senator Jeff Flake, (R-AZ), (L) and Rep. Chris Van Hollen, (D-MD) look on at an airport near Havana, Cuba in this December 17, 2014 White House handout photo. (Reuters)

CIA-backed Cuban exiles suffered a bloody defeat in the Bay of Pigs invasion and during the 1962 "Missile Crisis" US 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 government 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.

Hero's welcome

Also returning was an unnamed intelligence agent who had been 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.

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 US Agency for International Development.

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