US President Barack Obama says a "new chapter" has been opened in Washington's ties with Cuba, saying it is time to end an "outdated approach" that had failed to move relations forward.
"Through these changes, we intend to create more opportunities for the American and Cuban people and begin a new chapter," Obama said in a televised address on Wednesday.
The United States has announced a "historic" thaw in relations with Cuba, saying it would work to re-establish diplomatic ties with Havana and ease long-standing trade and travel sanctions.
Washington will re-establish an embassy in Havana "in the coming months," a senior administration official said following a prisoner exchange between the two countries.
Cuban President Raul Castro said Cuba had agreed to reestablish diplomatic ties with the United States after the prisoner swap paved the way to a breakthrough with its Cold War foe.
"We have agreed to reestablish diplomatic ties after more than half a century," he said in a nationally broadcast address.
He added, however, that the divisive issue of the US trade embargo, which he called the "blockade," remained unresolved.
UN chief Ban Ki-moon welcomed the decision to normalise ties and offered UN help to develop the new relationship.
"The United Nations stands ready to help both countries to cultivate their good neighborly relations," Ban told a news conference at UN headquarters.
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