But diplomats from the old adversaries said there were many difficulties to overcome as the two nations move toward fully normalizing ties.

"This milestone does not signify an end to the many differences that still separate our governments," said US Secretary of State John Kerry, who announced he will visit Havana on August 14.

He will be the first US top diplomat to tour the Cuban capital since 1945.

"But it does reflect the reality that the Cold War ended long ago, that the interests of both countries are better served by engagement than by estrangement," Kerry insisted.

Switching to Spanish, Kerry said: "We are determined to live as good neighbors on the basis of mutual respect."

July 20 was a day of celebration "because today we begin to repair what was damaged and to open what has been closed for many years."

He was speaking after welcoming Cuban Foreign Minister Bruno Rodriguez, who became the first top Cuban diplomat to set foot inside the State Department since 1958.

But their differences were immediately laid bare when Rodriguez swiftly demanded an end to the US economic embargo on the communist-run Caribbean island and the return of territory used as a US military base in southern Guantanamo Bay.

"Totally lifting the blockade, the return of the illegally occupied territory of Guantanamo, as well as the full respect for Cuban sovereignty and the compensation to our people for human and economic damages, are crucial to be able to move towards the normalization of relations," Rodriguez said. (AFP)