Obama, Castro declare historic breakthrough in US-Cuba ties

The United States and Cuba brought their bitter Cold War stand-off towards a historic close on Wednesday (Dec 17), agreeing to revive diplomatic ties and to ease a five-decade US 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.

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"We will end an outdated approach that for decades has failed to advance our interests and instead we will begin to normalise relations between our two countries.

"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 said.

The 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.

The United States in turn released 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.