DHAKA: US President Barack Obama has hailed a "new chapter" in US relations with Cuba, announcing moves to normalise diplomatic and economic ties.

Obama said Washington's current approach was "outdated" and the changes were the "most significant" in US policy towards Cuba in 50 years, reports BBC.com

Cuban President Raul Castro said he welcomed the shift in a TV address.

The move includes the release of US contractor Alan Gross and three Cubans held in the US.

Wednesday's announcements follow more than a year of secret talks in Canada and at the Vatican, directly involving Pope Francis.

US-Cuba relations have remained frozen since the early 1960s, when the US broke off diplomatic relations and imposed a trade embargo after Cuba's revolution led to communism.

BDST: 0838  HRS, DEC 18, 2014