Obama also said he would up uphold the embargo imposed after the island went communist, to use as leverage until Cuba shows "significant steps toward democracy," starting with freedom for approximately 219 jailed political prisoners.
For nearly five decades, the embargo is where the two nations have been stuck, each side demanding that the other change first.
What's different now is that Obama says he will talk directly with Cuban President Raul Castro, who recently and repeatedly offered to negotiate on neutral ground as equals.
These openings have Cubans feeling more optimistic about getting unstuck than ever before.
"What we want is that the Americans no longer look at us as enemies," said Lazaro Medardo, 68, who was selling sunflowers, red roses and gladiolas from a pushcart in old Havana on Monday. "We aren't their enemies."
Cuban-Americans have had a mixed reaction to Obama's campaign promises - most voted against him, but Obama carried Florida and didn't even need the state's votes to win the presidency, confounding the notion that the support of anti-Castro Cuban exiles is essential in presidential elections.
"Obama already has a much freer hand than Bush did," said Daniel Erickson of the Inter-American Dialogue, a Washington, D.C. think tank. "He does not owe any of his political success to Cuban-Americans in South Florida."
Obama is therefore free to chart a new course. He can reverse some policies of President George W. Bush with a pen stroke, and while undoing the embargo would take a majority in Congress, that's easier than ever with Democrats holding sizable majorities.
A fresh U.S. approach could improve relations across Latin America, according to a report last week from the Brookings Institution think tank in Washington, which said America's Cuba policy has hindered Washington's ability to work with other countries throughout the region.
Top figures in the incoming administration also have favored more open relations.
As chairman of the Senate Foreign Relations Committee, Vice President-elect Joe Biden called for re-establishing mail service with Cuba and easing family travel restrictions.
The future secretary of state, Hillary Clinton, campaigned against Obama's openness to talking with Raul Castro, but said she would respond positively to Cuban actions demonstrating a willingness to change. Also, Obama's initial moves have a Clinton precedent: President Bill Clinton eased travel regulations during the last three years of his tenure.
Obama's nominee for U.N. ambassador, Susan E. Rice, has said America needs a new approach, one that "actually tries to catalyze change on the island."
The new commerce secretary, New Mexico Gov. Bill Richardson, has been there and done that, in small ways.
As a congressman, Richardson secured the release of three Cuban political prisoners during talks with Fidel Castro in Havana in 1996. As U.N. ambassador in 1997, he held talks about terrorism with then Cuban Foreign Minister Roberto Robaina.
Richardson will replace Cuban-born Carlos Gutierrez, a harsh Castro critic who co-chaired the White House Commission for Assistance for a Free Cuba. Cuba called it a cover for regime change, and it seems unlikely to survive into the new administration.
The saga of Elian Gonzalez, the Cuban boy who was rescued at sea and became a cause celebre in 2000, is being revisited as Obama's appointments are studied for clues to future Cuba policy:
Manny Diaz, Miami's Cuban-American mayor and a candidate for housing and urban development secretary, was on the legal team that fought unsuccessfully to keep Elian with his Miami relatives.
Eric Holder, Obama's choice for attorney general, was the No. 2 Justice Department official when armed federal officers seized Elian and returned him to his father in Cuba. The White House counsel will be Gregory Craig, who was the father's attorney.
Embargo supporters fear the Obama team will concede too much.
"For the embargo or the additional sanctions to be lifted, certain steps must be taken: Respect for human rights, the release of all political prisoners and free and democratic elections," Miami radio and TV host Ninoska Perez wrote in an opinion piece in USA Today. "It's the Cuban regime that must change, not U.S. policy."
Cuba's communist leadership, which blames the embargo for most Cuban problems, also is skeptical.
"It would be extremely naive to believe that the good will of a smart person could change what is the result of centuries of selfishness and vested interests," ailing former President Fidel Castro recently wrote about Obama.
But some Cubans think Obama just might make change happen.
"His thinking is more international," 35-year-old Eduardo Betancourt said as he leaned on his bicycle in an Old Havana plaza. "I don't have family in the United States, but many of my friends do and hope they will now see them more often."
Anita Snow has been the chief of The Associated Press bureau in Havana since 1999.
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