WASHINGTON (AP) -- President Barack Obama announced the re-establishment of diplomatic relations and an easing in economic and travel restrictions on Cuba Wednesday, declaring an end to America's "outdated approach" to the communist island in a historic shift aimed at ending a half-century of Cold War enmity.
"Isolation has not worked," Obama said in remarks from the White House. "It's time for a new approach."
As Obama spoke, Cuban President Raul Castro addressed his own nation from Havana. He said that while profound differences remain between the two nations in such areas as human rights and foreign policy, they must learn to live with those differences "in a civilized manner."
Obama's action marked an abrupt use of U.S. executive authority. However, he cannot unilaterally end the longstanding U.S. economic embargo on Cuba, which was passed by Congress and would require action from lawmakers to overturn.
Wednesday's announcements followed more than a year of secret talks between the U.S. and Cuba, including clandestine meetings in Canada and the Vatican and personal involvement from Pope Francis. The re-establishment of diplomatic ties was accompanied by Cuba's release of American Alan Gross and the swap of a U.S. spy held in Cuba for three Cubans jailed in Florida.
In a statement, the Vatican said Pope Francis "wishes to express his warm congratulations for the historic decision taken by the governments of the United States of America and Cuba to establish diplomatic relations, with the aim of overcoming, in the interest of the citizens of both countries, the difficulties which have marked their recent history."
Obama said Gross' five-year imprisonment had been a major obstacle in normalizing relations. Gross arrived at an American military base just outside Washington Wednesday morning, accompanied by his wife and a handful of U.S. lawmakers. He went immediately into a meeting with Secretary of State John Kerry.
As part of resuming diplomatic relations with Cuba, the U.S. will soon reopen an embassy in the capital of Havana and carry out high-level exchanges and visits between the governments. The U.S. is also easing travel bans to Cuba, including for family visits, official U.S. government business and educational activities. Tourist travel remains banned.
Licensed American travelers to Cuba will now be able to return to the U.S. with $400 in Cuban goods, including tobacco and alcohol products worth less than $100 combined. This means the long-standing ban on importing Cuban cigars is over, although there are still limits.
The U.S. is also increasing the amount of money Americans can send to Cubans from $500 to $2,000 every three months. Early in his presidency, Obama allowed unlimited family visits by Cuban-Americans and removed a $1,200 annual cap on remittances. Kerry is also launching a review of Cuba's designation as a state sponsor of terror.
Obama said he continued to have serious concerns about Cuba's human rights record but did not believe the current American policy toward the island was advancing efforts to change the government's behavior.
"I do not believe we can keep doing the same thing for over five decades and expect a different result," he said.
There remains a divide on Capitol Hill over U.S. policy toward Cuba. While some lawmakers say the embargo is outdated, others say it's necessary as long as Cuba refuses to reform its political system and improve its human rights record.
Sen. Marco Rubio, R-Fla., said the new U.S. policy would do nothing to address those issues.
"But it potentially goes a long way in providing the economic lift that the Castro regime needs to become permanent fixtures in Cuba for generations to come," Rubio said.
U.S. officials said Cuba was taking some steps as part of the agreement to address its human rights issues, including freeing 53 political prisoners.
Cuba also released a non-American U.S. intelligence `asset' along with Gross. Officials said the spy had been held for nearly 20 years and was responsible for some of the most important counterintelligence prosecutions that the United States has pursed in recent decades. That includes convicted Cuban spies Ana Belen Montes, Walter Kendall Myers and Gwendolyn Myers and a group known as the Cuban Five.
The three Cubans released in exchange for the spy are part of the Cuban Five -- a group of men who were part of the "Wasp Network" sent by Cuba's then-President Fidel Castro to spy in South Florida. The men, who are hailed as heroes in Cuba, were convicted in 2001 in Miami on charges including conspiracy and failure to register as foreign agents in the U.S.
Two of the five were previously released after finishing their sentences.
Gross was detained in December 2009 while working to set up Internet access as a subcontractor for the U.S. Agency for International Development, which does work promoting democracy in the communist country. It was his fifth trip to Cuba to work with Jewish communities on setting up Internet access that bypassed local censorship.
Bonnie Rubinstein, Gross' sister, heard the news from a cousin, who saw it on television.
"We're like screaming and jumping up and down," she said in a brief telephone interview from her home in Texas.
Cuba considers USAID's programs illegal attempts by the U.S. to undermine its government, and Gross was tried and sentenced to 15 years in prison.
Gross' family has said he was in ailing health. His wife, Judy, said in a statement earlier this month that Gross has lost more than 100 pounds, can barely walk due to chronic pain, and has lost five teeth and much of the sight in his right eye.