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 A photograph showed Obama and Castro, both wearing dark suits,
chatting in a small group of leaders at the summit's opening
ceremony. A White House official confirmed the two men shook hands
and spoke briefly.
"This was an informal interaction and there was not a substantive
conversation between the two leaders," the official said.
Obama and Castro are expected to meet again on Saturday and talk
about their efforts to restore full diplomatic relations and boost
trade and travel between the two countries.
Their rapprochement, first unveiled in a historic policy shift in
December, is the central issue at the Summit of the Americas meeting
in Panama.
"As we move towards the process of normalization, we'll have our
differences government to government with Cuba on many issues. Just
as we differ at times with other nations within the Americas, just
as we differ with our closest allies," Obama said earlier on Friday.
But the 53-year-old Obama, who was not even born when Fidel and Raul
Castro swept to power in Cuba's 1959 revolution, also said the
United States is no longer interested in trying to impose its will
on Latin America.
 "The days in which our agenda in this hemisphere so often presumed
that the United States could meddle with impunity, those days are
past," he said.
Apart from a couple of brief, informal encounters, the leaders of
the United States and Cuba have not had any significant meetings
since the Castro brothers toppled U.S.-backed dictator Fulgencio
Batista and then steered their Caribbean country into a close
alliance with the Soviet Union.
Colombian President Juan Manuel Santos hailed Obama's push to
improve relations with Cuba, saying it was helping to heal a
"blister" that was hurting the region.
However, Cuban dissident Guillermo Farinas said civic groups in Cuba
have been sidelined from talks and appealed to Obama to support
their push for more democracy.
"The Cuban government is showing no goodwill ... They don't want to
make any kind of concessions," he told Reuters.
Obama, who met with activists from across Latin America, including
two Cuban dissidents, appears to be close to removing communist-run
Cuba from a U.S. list of countries that it says sponsor terrorism.
Its inclusion on the list brings a series of automatic U.S.
sanctions and Cuba is insisting it be taken off as a condition of
restoring diplomatic ties.
Washington imposed trade sanctions on Cuba from 1960 and broke off
diplomatic relations with Cuba in 1961, but the ensuing freeze did
it no favors, said Ben Rhodes, Obama's deputy national security
adviser.
"Our Cuba policy, instead of isolating Cuba, was isolating the
United States in our own backyard," he noted.
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COOPERATION
The two countries have maintained contact through interests sections
in Havana and Washington since 1977, and in recent years they have
increasingly cooperated on issues such as migration and drug
trafficking.
The State Department has now recommended that Cuba be taken off the
terrorism list, a U.S. Senate Foreign Relations Committee aide said.
Obama is expected to agree, although it is not clear whether he will
announce it during the summit.
Obama has already used his executive authority to ease some trade
and travel restrictions, and is seeking to encourage nascent small
businesses in Cuba by allowing more exports there.
But only Congress, controlled by Republicans, can remove the overall
U.S. economic embargo on the island. The rapprochement by Obama, a
Democrat, has met some resistance in Washington and among some
influential Cuban-Americans.
Critics say Cuba should not be rewarded unless it changes its
one-party political system.
While Obama's policy has been widely praised around Latin America,
this was tempered last month when his administration imposed
sanctions on Venezuela, Cuba's closest ally and main benefactor.
That controversy now hangs over the summit this weekend.
Venezuelan President Nicolas Maduro plans to present Obama with a
petition signed by millions of people demanding that the sanctions
be reversed. He is certain to receive support from Castro and other
left-wing leaders in Latin America.
"It is no time for imperialism, threats, it is time for peace,
cooperation, union, progress, prosperity," Maduro said on arrival in
Panama.
(Additional reporting by Daniel Trotta, Anahi Rama, Jeff Mason,
Roberta Rampton; Editing by Kieran Murray, Simon Gardner and Frances
Kerry)
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