President Barack Obama said the US has chosen to "cut loose the shackles of the past" by normalising relations with Cuba and re-opening economic ties with the communist-ruled island country.
Mr Obama said the US would reopen an embassy in Havana, closed in 1961, and permit cash remittances and increased travel by US citizens to the country located just 90 miles off its coast.
The thaw in relations, broken off two years after forces led by Fidel Castro overthrew the Cuban government, marks the end of a bitter Cold War-era rivalry dating back more than five decades, far outlasting the decline of the Soviet Union and the fall of the Berlin Wall.
“Neither the American nor the Cuban people are well served by a rigid policy that’s rooted in events that took place before most of us were born,” said Mr Obama. “It’s time for a new approach.”
Most significant
The change, hailed by the president as the “most significant” in US policy to Cuba in more than half a century, was compared with President Nixon’s normalisation of relations with
China
in 1972.
The president noted that relations were restored with China – "a far larger country also governed by a Communist Party" – more than 35 years ago and almost two decades ago with Vietnam "where we fought a way that claimed more Americans than any Cold War confrontation."
The shift in US foreign policy coincided with the sudden release of American government contractor Alan Gross (65) who had been imprisoned by Cuba for five years. Mr Obama said that the imprisonment of Mr Gross, who was arrested in 2009 and sentenced to 15 years in a Cuban prison, had been "a major obstacle" in the way of a change in US-Cuban relations.
As Mr Gross returned on a US government plane yesterday morning, the US repatriated three Cuban spies who had been held in an American prison since 2001 in exchange for the freeing of a US intelligence agent who had been in a Cuban prison for 20 years.
Cuba agreed to release Mr Gross on humanitarian grounds as his health had deteriorated since he went on hunger strike this year.
Mr Obama said that the US would review Cuba's designation as a state sponsor of terrorism, while Cuban president Raul Castro said that his government would release 53 other political prisoners.
The US president noted that the 54-year American trade embargo of Cuba’s economy “had little effect beyond providing the Cuban government with a rationale for restrictions on its people”.
In his own national televised address, Mr Castro said: "These 50 years have shown isolation has not worked. It's time for a new approach. I call on the government of the United States to remove obstacles that block or restrict the ties between our countries."
As critics of the policy change in the Cuban community in Florida branded the president the “appeaser in chief”, prominent Cuban-American politicians lashed Mr Obama for dealing with the regime.
Senator Bob Menendez, a Democrat and chairman of the powerful Senate foreign relations committee, said Mr Obama's actions "vindicated the brutal behaviour of the Cuban government."
The exchange of Americans for convicted criminals “sets an extremely dangerous precedent” and invites “dictatorial and rogue regimes to use Americans serving overseas as bargaining chips,” said Mr Menendez, the son of Cuban immigrants.
Another Cuban-American, Senator Marco Rubio of Florida, called Mr Obama's decision to open diplomatic relations "disgraceful."
"The White House has conceded everything," he said, noting that the policy change had resulted in no commitment from Cuba to ensure freedom of the press, freedom of speech or elections.
Describing the announcement as “outrageous and counterproductive,” he warned that he would use “everything within the rules of the Senate” to prevent the new US diplomatic outpost in Havana being filled or funded.
