by Enrique Krause and Biodun Iginla, BBC News, Panama City
25 minutes ago
This is their first full meeting since the thaw began in December.
Mr Castro has called for the lifting of the US economic blockade on Cuba, in place since 1959.
He added that over time it would be possible to "turn the page" on old divisions but he acknowledged that there were still significant differences.
"We have both concluded that we can disagree with a spirit of respect and civility."
Mr Obama said that immediate tasks include normalising diplomatic relationships between the two countries and opening a US embassy in Havana and a Cuban embassy in Washington DC.
Mr Castro said that he was ready to talk about sensitive issues but that patience would be needed.
"We are willing to make progress in the way the president has described," he said.
He joked that as he had missed the previous six summits, he would multiply the eight minutes he had been allotted for his speech by as much.
In the end, he was not far off that length.
He began with a passionate history lesson, recounting the revolution and the many US attempts to overthrow and destabilise the Communist government.
But he then apologised to President Obama, saying that he could not be blamed for events which predated his presidency and called the US leader "an honest man".
President Obama, for his part, said he did not want to be "imprisoned" by history but would look towards the future - a future in which considerable differences between the US and Cuba would persist, he said, but in which he would not be caught up in ideology.
Scenes from a warming US-Cuba relationship
Earlier, the Cuban leader referred to Mr Obama as an "honest man" after a lengthy speech largely taken up with the history of US-Cuba relations.
"When I talk about the revolution, the passion oozes out of me," the Cuban leader said. "I have to ask President Obama for forgiveness. He is not responsible for the things which happened before his time."
Speaking to fellow leaders, Mr Obama said: "This shift in US policy represents a turning point for our entire region."
The US broke off diplomatic relations with Cuba in 1959 after Fidel Castro and his brother Raul led a revolution toppling US-backed President Fulgencio Batista. The Castros established a revolutionary socialist state with close ties to the Soviet Union.
The Summit of the Americas brings together the leaders of North, Central and South America. This, the seventh, is the first which Cuba is attending.
Attempts to improve relations between the US and Cuba began in December when Mr Obama declared Washington's approach "outdated".
Political reform and human rights in Cuba are matters of particular concern to Washington.
Along with an end to the embargo, Havana wants removal from Washington's list of state sponsors of terrorism, something Mr Obama has already signalled he is prepared to do.
Cuba's presence on the list has been one of the main hurdles on the way to closer ties between the two countries as it hampers Cuba's ability to conduct financial transactions.
As US ties with Cuba improve, those between Venezuela and Washington remain fractious.
The US imposed sanctions last month on a group of Venezuelan officials it accuses of human rights abuses. Mr Obama also issued an executive order declaring Venezuela a threat to US national security.
Venezuelan President Nicolas Maduro, speaking at the summit, described the order as "disproportionate" but said he was ready to talk with the US president to "resolve differences".
The summit also highlighted stark differences between President Rafael Correa of Ecuador and the US.
Mr Correa said the US had failed to live up to its ideals: "Let's talk about human rights. In Ecuador we don't have torture, the death penalty or extrajudicial renditions."
In response, Mr Obama said he always "enjoyed the history lessons" he received a such summits, but was the first to acknowledge US faults.
"America does not make a claim to being perfect; we make a claim to being open to change," he said.
25 minutes ago
US President Barack Obama and Cuban
President Raul Castro have met on the fringes of the Summit of the
Americas, the first formal talks between the two countries' leaders in
half a century.
Earlier, Mr Obama described the historic thaw in US-Cuba relations as a "turning point". This is their first full meeting since the thaw began in December.
Mr Castro has called for the lifting of the US economic blockade on Cuba, in place since 1959.
Sensitive issues
President Obama said that it was time to "try something new" and that it was important for the US to engage more directly with the Cuban government and the Cuban people.He added that over time it would be possible to "turn the page" on old divisions but he acknowledged that there were still significant differences.
"We have both concluded that we can disagree with a spirit of respect and civility."
Mr Obama said that immediate tasks include normalising diplomatic relationships between the two countries and opening a US embassy in Havana and a Cuban embassy in Washington DC.
Mr Castro said that he was ready to talk about sensitive issues but that patience would be needed.
"We are willing to make progress in the way the president has described," he said.
At the scene - Vanessa Buschschluter, BBC News, Panama City
This was Cuba's first time at a Summit of the Americas and Raul Castro certainly made the most of the stage he was offered.He joked that as he had missed the previous six summits, he would multiply the eight minutes he had been allotted for his speech by as much.
In the end, he was not far off that length.
He began with a passionate history lesson, recounting the revolution and the many US attempts to overthrow and destabilise the Communist government.
But he then apologised to President Obama, saying that he could not be blamed for events which predated his presidency and called the US leader "an honest man".
President Obama, for his part, said he did not want to be "imprisoned" by history but would look towards the future - a future in which considerable differences between the US and Cuba would persist, he said, but in which he would not be caught up in ideology.
Read more:
Changing US relations with Latin AmericaScenes from a warming US-Cuba relationship
Earlier, the Cuban leader referred to Mr Obama as an "honest man" after a lengthy speech largely taken up with the history of US-Cuba relations.
"When I talk about the revolution, the passion oozes out of me," the Cuban leader said. "I have to ask President Obama for forgiveness. He is not responsible for the things which happened before his time."
Speaking to fellow leaders, Mr Obama said: "This shift in US policy represents a turning point for our entire region."
The US broke off diplomatic relations with Cuba in 1959 after Fidel Castro and his brother Raul led a revolution toppling US-backed President Fulgencio Batista. The Castros established a revolutionary socialist state with close ties to the Soviet Union.
The Summit of the Americas brings together the leaders of North, Central and South America. This, the seventh, is the first which Cuba is attending.
Attempts to improve relations between the US and Cuba began in December when Mr Obama declared Washington's approach "outdated".
Political reform and human rights in Cuba are matters of particular concern to Washington.
Along with an end to the embargo, Havana wants removal from Washington's list of state sponsors of terrorism, something Mr Obama has already signalled he is prepared to do.
Cuba's presence on the list has been one of the main hurdles on the way to closer ties between the two countries as it hampers Cuba's ability to conduct financial transactions.
As US ties with Cuba improve, those between Venezuela and Washington remain fractious.
The US imposed sanctions last month on a group of Venezuelan officials it accuses of human rights abuses. Mr Obama also issued an executive order declaring Venezuela a threat to US national security.
Venezuelan President Nicolas Maduro, speaking at the summit, described the order as "disproportionate" but said he was ready to talk with the US president to "resolve differences".
The summit also highlighted stark differences between President Rafael Correa of Ecuador and the US.
Mr Correa said the US had failed to live up to its ideals: "Let's talk about human rights. In Ecuador we don't have torture, the death penalty or extrajudicial renditions."
In response, Mr Obama said he always "enjoyed the history lessons" he received a such summits, but was the first to acknowledge US faults.
"America does not make a claim to being perfect; we make a claim to being open to change," he said.
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