Obama Thaws Half-Century Freeze; Opponents Vow to Fight End to Embargo.

The U.S. and Cuba agreed to restore diplomatic ties after a half century of hostility, ending one of the world’s last Cold War standoffs and launching a realignment of the politics of the Americas. President Barack Obama and Raúl Castro, in synchronized announcements Wednesday, said that their long-estranged countries would restart cooperation on a range of issues and reestablish an American embassy in Havana that closed in 1961 after the Cuban Revolution. The leaders agreed to a series of landmark diplomatic steps after reaching a deal to free U.S. aid worker Alan Gross, who was imprisoned in Cuba for the past five years. The White House also agreed to return three Cuban agents jailed in the U.S. in exchange for Cuba’s release of one unnamed American intelligence operative who had been held for nearly two decades. The policy changes fall short of fully lifting the 54-year U.S. embargo against Cuba, which would require an act from Congress. But they forge significant economic ties between the two nations by allowing American financial institutions to open accounts with Cuban counterparts, easing restrictions on the export of U.S. agricultural and telecommunications gear to Cuba and permitting Americans to use credit and debit cards there. U.S. residents will be allowed to send up to $2,000 every three months to relatives on the island—four times the current limit. The new regulations will make it easier for Americans to travel to Cuba under the 12 categories of travel now allowed, which currently range from family visits to humanitarian projects and educational and sports activities—and bring home more than $400 worth of goods, including a limited amount of Cuban cigars.

The Obama administration has also begun the process of removing the U.S. designation of Cuba as a state sponsor of terrorism. The softening of U.S. relations with Cuba, a nation of 11 million just 90 miles off the coast of Florida, is the latest in a series of attempts by Mr. Obama to recalibrate American foreign policy as his time in office winds down.

More From The Wall Street Journal (subscription required):