Obama to announce major Cuba policy overhaul; prisoners swapped

US President Barack Obama was set to announce a major shift in policy toward Cuba on Wednesday, which would include the opening of an embassy in Havana and the start of talks to normalise relations, officials and media said.

The shift in policy, set to be one of the biggest changes in decades of animosity between communist-ruled Cuba and the United States, was heralded by Cuba's release of American aid worker Alan Gross after five years in prison in a reported prisoner exchange with Havana.

Obama was due to make a statement at noon (1700 GMT) on Cuba, the White House said, and a US official said he would announce a shift in Cuba policy.

Cuban President Raul Castro was also set to make a statement at that time.

A US official said Washington aimed to open an embassy in Cuba as part of its plan.

The Associated Press, citing officials, said the administration would launch talks to normalise relations.

A senior congressional aide said Obama would ease the embargo and travel restrictions that prevent most Americans from visiting the island.

The two countries have been ideological foes since soon after the 1959 revolution that brought Raul Castro's older brother, Fidel Castro, to power.

Washington and Havana have no diplomatic relations and the United States has maintained a trade embargo on Cuba for more than 50 years.

Washington's policy has survived the end of the Cold War as the United States pushes for democratic reform in Cuba.

The US official said Gross was released on humanitarian grounds and left Cuba on a US government plane bound for the United States.

In addition to Gross, congressional sources said the prisoner exchange included Cuba's release of a CIA prisoner and the US release of three Cuban intelligence agents.

Jailed US Agency for International Development (USAID) contractor Alan Gross, (R), poses for a picture during a visit with Cuban Jewish Community leader Adela Dworin, (C), and David Prinstein, Vice President, at Havana's Carlos J Finlay Military Hospital Sept 28, 2012. Reuters

Cuba arrested Gross, now 65, on Dec 3, 2009, and later sentenced him to 15 years in prison for importing banned technology and trying to establish clandestine Internet service for Cuban Jews.

Gross had been working as a subcontractor for the US Agency for International Development (USAID).

A congressional aide said that Gross would land at Andrews military base, near Washington DC, at noon.

Whatever he announces in terms of a wider policy shift, Obama was bound to face criticism in Washington and within the Cuban exile community in Miami for freeing the Cuban intelligence agents after 16 years in prison.

Their freedom will be hailed as a resounding victory at home for Raul Castro.

Robert Menendez, a Cuban American who is chairman of the Senate Foreign Relations Committee, was quick to condemn the developments, saying trading Gross for "convicted criminals sets an extremely dangerous precedent".

Obama's actions "vindicated the brutal behaviour of the Cuban government", he said in a statement.

Ailing prisoner

The payoff for Obama was the release of Gross, whose lawyer and family have described him as mentally vanquished, gaunt, hobbling and missing five teeth.

US officials had long cited Cuba’s refusal to free Gross as one of the biggest impediments to improved relations and had held out the possibility that his release could open the door to such steps.

Senior Democratic Senator Dick Durbin said talks for Gross' release lasted about a year and the Vatican played a role, as did Cuban Archbishop Jaime Ortega.

Gross's case raised alarm about USAID's practice of hiring private citizens to carry out secretive assignments in hostile places.

Cuba considers USAID another instrument of continual US harassment dating back to Cuba's 1959 revolution.

Fidel Castro retired in 2008, handing power to his brother.

Raul Castro has undertaken a series of economic reforms, but has maintained a one-party political system.

The United States has said it wants to promote democracy in Cuba, where political opponents are repressed and the state controls the media.

Cuba's President Raul Castro attends the opening session of the 10th ALBA alliance summit in Havana Dec 14, 2014. Reuters

Steps by Obama toward normalising relations with Cuba could stir opposition from some sectors of the large community of Cuban exiles, who have traditionally been politically well connected and well financed.

The three Cuban intelligence agents, jailed since 1998, are Gerardo Hernandez, 49, Antonio Guerrero, 56, and Ramon Labañino, 51.

Two others had been released before on completing their sentences - Rene Gonzalez, 58, and Fernando Gonzalez, 51.

The so-called Cuban Five were convicted for spying on anti-Castro exile groups in Florida and monitoring US military installations.

They are hailed as anti-terrorist heroes in Cuba for defending the country by infiltrating exile groups in Florida at a time when anti-Castro extremists were bombing Cuban hotels.

Two were due to be released in coming years but Gerardo Hernandez, the leader, received a double life sentence for conspiracy in Cuba's shooting down of two US civilian aircraft in 1996, killing four Cuban-Americans.

Obama has authority to unilaterally gut the trade embargo against Cuba and allow US citizens to travel freely to the island.

His State Department can remove Cuba from a list of state sponsors of terrorism, a designation that carries with it further economic sanctions.

Despite their animosity, the two countries have long been engaged on a host of issues such as immigration, drug interdiction and oil-spill mitigation.