US, Cuba relationship ready to confront 'any issue'

US Secretary of State John Kerry (C) and city historian Eusebio Leal (centre L) walk through Old Havana, Cuba (Reuters)
US Secretary of State John Kerry (C) and city historian Eusebio Leal (centre L) walk through Old Havana, Cuba (Reuters)

Secretary of State John Kerry has left Cuba after a historic visit to raise the US flag at the American embassy - a milestone in Washington's rapprochement with its one time foe.

The top US diplomat called for "genuine democracy" in Cuba as the American flag was raised over a US embassy in Havana for the first time in 54 years.

At a pageant-filled ceremony earlier on Friday (local time), he gave the cue to hoist the Stars and Stripes over the glass-and-concrete building on the Havana waterfront.

Three retired Marines who lowered the flag on January 4, 1961 - when Washington severed ties with Havana at the height of the Cold War - were present to hand the new flag to the Marine guard now charged with security at the embassy.

The symbolic moment served as a picture-perfect coda to eight months of rapid change since the December 17 rapprochement announcement by US President Barack Obama and Cuban counterpart Raul Castro, which paved the way for the two countries to reopen their embassies on July 20.

The first secretary of state to visit Cuba since 1945, Kerry said the shift in US policy did not mean Washington would stop pressing for change on the communist island.

Underlining the sticking points still complicating relations, Fidel Castro said in an essay published in Cuban state media on Thursday that the US owes Cuba "many millions of dollars" because of the trade embargo.

Cuba says the US trade embargo has cost it US$116 billion.

The US for its part, says Cuba owes US$7 billion to American citizens and companies whose property was seized after Castro came to power.

Kerry reiterated that the Obama administration "strongly favours" lifting the embargo.

But Obama faces an uphill battle as he needs approval from Congress, where both houses are currently controlled by his Republican opponents.

Kerry said lifting the embargo was a "two-way street" that would also require the Cuban government to allow greater freedoms.