By Sky News US Team
The United States and Cuba have moved to end decades of hostilities following an exchange of prisoners, including US government contractor Alan Gross.
Barack Obama outlined a "policy of engagement" on Wednesday that included re-establishing diplomatic relations, easing a decades-old trade embargo and relaxing travel restrictions.
The President said ending the "outdated approach" to Cuba was necessary to normalise relations with the communist-ruled island.
"These 50 years have shown that isolation has not worked," Mr Obama said. "It's time for a new approach."
The announcement came after Mr Gross, who was held in a Cuban prison for five years, arrived at Joint Base Andrews outside Washington.
Cuba also released an unidentified "intelligence agent" as part of a prisoner exchange that included three Cubans imprisoned in Florida for spying.
Mr Obama said Pope Francis played a key role in helping both sides reach the agreement.
Cuban President Raul Castro, addressing Cuban citizens on state television, said he welcomed the restoration of relations with the United States, but stressed profound differences remained.
He said both countries would have to learn to live with their differences "in a civilised manner".
UN Secretary-General Ban Ki-moon welcomed the "very positive" announcement and thanked the leaders from both countries "for taking this very important step".
Cuba and the US have been ideological foes since soon after the 1959 revolution that brought Mr Castro's older brother, Fidel Castro, to power.
Formal diplomatic relations between the two countries were severed in 1961.
In recent years, Mr Gross' imprisonment served as a major sticking point to improving ties.
Mr Obama's decision to move ahead with the prisoner swap was met with criticism from some members of Congress.
US Senator Robert Menendez, a Democrat, said the President's "actions have vindicated the brutal behaviour of the Cuban government".
"Trading Mr Gross for three convicted criminals sets an extremely dangerous precedent," he said in a news release.
Senator Marco Rubio, a Cuban-American Republican from Florida, told Fox News the exchange "puts a price on Americans abroad".
He promised to block any nominee to an ambassador post in Cuba.
Mr Obama said Secretary of State John Kerry would immediately begin re-establishing diplomatic relations, including the opening of a US embassy in Havana.
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Gallery: A History Of US-Cuba Relations In Pictures
1 January 1959: Fidel Castro's rebels - under the command of Che Guevara (R) - sweep into Havana. Dictator Fulgencio Batista, who had strong relations with the American mafia and large US corporations, flees Cuba. The US soon recognises the new government
June-October 1960: Castro announces the nationalisation of nearly all US businesses - and American-owned oil refineries, after they refuse to process Soviet oil
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