The United States, in a bid to renew its relationship with Cuba has reopened its embassy in the country after more than 54 years since it was closed.
John Kerry, the first U.S. Secretary of State to visit Cuba in 70 years, presided over the ceremony in Havana.
The U.S. flag was presented by the same US marines who brought it down in 1961.
Notwithstanding the Cuban government remains unhappy with the failure of Washington to lift the trade embargo on the island.
In an open letter on Thursday, in state newspaper Granma to mark his 89th birthday, Mr. Castro said the US owed Cuba millions of dollars because of its 53-year-long embargo.
Mr Kerry, speaking during the ceremony, described the hoisting of the flag as a “historic moment.”
He stressed, however, that the U.S. would not stop pressing for political change in Cuba.
“The people of Cuba would be best served by a genuine democracy, where people are free to choose their leaders,” he told a crowd of hundreds gathered outside the embassy building.
He conceded nevertheless that US policies have not always led to democracy.
“Cuba’s future is for Cubans to shape,” he stressed.
While trade and travel restrictions have been relaxed, the Republican-led U.S. Congress has not lifted the trade embargo the U.S. imposed on Cuba in 1960.