United States President Barack Obama challenged Cuba's Communist Government with an impassioned call for democracy and economic reforms yesterday, addressing the Cuban people directly in a historic speech broadcast throughout the island.

Taking the stage at Havana's Grand Theatre with President Raul Castro in attendance, Obama, who later in the day arrived in Argentina where he hopes to reset relations after years of tension, said he was in Cuba to extend a hand of friendship and "bury the last remnant" of the Cold War in the Americas.

But he also pressed hard for economic and political reforms and greater openness in a one-party state where the Government stifles dissent, internet access is low and the media is in state hands.

His speech was the high point of a 48-hour trip made possible by his agreement with Castro in December 2014 to cast aside decades of hostility that began soon after Cuba's 1959 revolution, and work to normalise relations.

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Nonetheless, Obama threw down a very public gauntlet to Castro, saying Cubans cannot realise their full potential if his Government does not allow change and relax its grip on Cuban politics and society.

"I believe citizens should be free to speak their minds without fear," Obama told the audience on the final day of his visit. "Voters should be able to choose their governments in free and democratic elections." He added: "I believe those human rights are universal. I believe they're the rights of the American people, the Cuban people and people around the world."

The hand-picked audience cheered him repeatedly, especially when he criticised the longstanding US economic embargo against Cuba, spoke glowingly of Cubans' talents and praised the country's achievements in healthcare and education.

The spectacle of the leader of the US, the superpower to the north for long reviled by Cuba's Government, standing in Havana and urging such changes in a speech broadcast into homes across the island would have been unthinkable before the two countries began their rapprochement 15 months ago.

- AAP