By Sarah Marsh and Frank Jack Daniel
HAVANA (Reuters) - Raul Castro has stepped down as president and his brother Fidel is dead but U.S. relations with Cuba are frostier than in years, with their reopened embassies nearly empty and President Donald Trump hinting at measures that could further lower the temperature.
A new Cuban president, 58-year-old Miguel Diaz-Canel, took office on Thursday after decades of rule by the Castros since they toppled a U.S.-backed dictator in 1959, nationalizing U.S. properties, allying with the Soviet Union and sending thousands of Cubans into exile in Florida.
The Castros were personally reviled by at least the older generation of Cuban-Americans, and some political analysts believe Diaz-Canel's ascent to power will make it easier over time for U.S. politicians to normalize relations.
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In the short term, though, the path ahead looks rocky.
In his first speech as president, Diaz-Canel, a stalwart of the ruling Communist Party, clearly stated he intends to preserve the one-party socialist system. Moreover, Castro, who will retain considerable political clout as head of the party, delivered a long parting speech in which he poured scorn on the Trump administration.
In turn, the White House was dismissive of the presidential change, saying the Trump administration did not see the Cuban people gaining greater freedoms and had no intention of softening its policy toward the government.
Trump took office last year promising to roll back Democratic former President Barack Obama's policy of engagement, which included re-establishing diplomatic relations.
The Republican president made it harder for U.S. businesses to invest in Cuba, while restoring some limitations on travel to the island that had briefly become a hotspot for American visitors for the first time in decades following Obama's loosening of restrictions.
Trump's latest choices for his foreign policy team - Secretary of State nominee Mike Pompeo and new national security advisor John Bolton - have advocated a hard line on Cuba and the president has hinted that a further roll-back of the engagement with Havana is on the cards.
"We're being very tough on Cuba because we want the people to have freedom," Trump said last week in an interview with Spanish-language network Univision. "You’re going to see some very, very good things happen," he said, adding that Bolton was "very strong on Cuba and Venezuela."
In a previous role in George W. Bush's presidency, Bolton included Cuba on an "Axis of Evil" list.
On Thursday, Trump was asked about the changes on the island and said, "We're going to take care of Cuba. We're going to take care of it," but did not elaborate.
Although Obama called for it to end, a decades-old economic embargo on Cuba is still in place. It would have to be lifted by the U.S. Congress, which is currently controlled by Trump's fellow Republicans.
While it is not clear what further steps Trump might take, Republican Senator Marco Rubio, a Cuban-American from Florida, has asked for more funding for democracy groups in Cuba and believes Washington should expand efforts to provide satellite internet access on the island, he told Reuters last week.
"The one project we're really going to focus on this year is breaking the info blockade," Rubio said.
Rubio has also called for the White House to expand the list of Cuban entities that U.S. companies are not allowed to do business with, in accordance with the administration's stated aim of stopping U.S. money flowing into Cuban government coffers.
William LeoGrande, who co-authored a book on the secret talks that led to the 2014 detente Obama reached with Castro, said new sanctions "would not be a surprise," but added that it was also possibly just more rhetoric.
At a Summit of the Americas in Lima this month, U.S. Vice President Mike Pence said Cuba's "tired Communist regime" denied its people basic rights, then walked out of the gathering. In reply, Cuban Foreign Minister Bruno Rodriguez decried a "moral vacuum" in the U.S. government.
Such gestures take Cuba and the United States back to the familiar territory of their nearly six decades of hostilities.
It was a far cry from the last Summit of the Americas, held in Panama in 2015. There Obama shook Castro by the hand as he unwound what he called a counterproductive U.S. policy of trying to force change by isolating Cuba.
BAY OF PIGS MEMORIES
There were more harsh words on Thursday, as Castro gave his farewell speech as president at an event timed to coincide with the 57th anniversary of the Bay of Pigs invasion, when a CIA-funded Cuban exile force tried to overthrow Fidel Castro.
Opening with a reference to Cuba's military victory then, Castro said Trump's language was "insulting" and accused the administration of spending millions of dollars on "subversion."
The two countries have not broken off diplomatic relations again or ditched talks that were re-established after the 2014 detente on issues from fighting crime to promoting agriculture.
But the number of U.S. diplomats in Havana is down to 12, a State Department roster shows, lower than in the depths of the Cold War and around a third of the number in 2015, when the embassy reopened. Cuba's presence in Washington is similarly reduced.
Most of the remaining embassy staff are there for security or administrative duties, according to a Reuters analysis of publicly available U.S. information.
The downgrade was triggered by a spate of unexplained illness among U.S. diplomatic staff in Havana that Canada says has also affected its embassy staff. Canada has withdrawn diplomatic families from the island, but has maintained staffing levels.
Cuba says the U.S. move was politically motivated.
Some dissidents in Cuba and former U.S. diplomats say the paucity of staff undermines Washington's stated aim of promoting pro-democracy movements.
With no chief political officer and no human rights officials at the embassy, rights activists say they find it harder to speak to U.S. officials and the embassy is holding fewer workshops. With virtually no consular services available in Havana, Cubans now have to travel abroad to get U.S. visas.
"Trump's measures are absolutely absurd. Access to the embassy and relations are more closed now than then it was the Interests Section," said Cuban human rights activist Miriam Leiva, using the name of the U.S. mission in Havana prior to the renewal of diplomatic relations.
Vicki Huddleston, a former head of the U.S. Interests Section in Havana, said tightening restrictions was a return to a failed policy that would hurt Cuban people.
"We are acting against our own national interest because we are pushing Cuba towards Russia and China," who are investing in the absence of U.S. companies, she said.
In Miami, older Cuban-American exiles have longed for decades for the end of the Castro era, and their mood was subdued over this week's transition to another generation of Communist leaders.
José Cancio, a member of Brigade 2506 that planned the Bay of Pigs invasion, supports Trump's reversal of Obama's policy, saying U.S. engagement with Cuba had only encouraged more repression against opposition activists on the island. But he recognized U.S. efforts to bring about change may be mostly futile.
"We wish for a miracle." he said.
(Reporting by Sarah Marsh and Frank Jack Daniel; Additional reporting by Nelson Acosta in Havana, Mitra Taj in Lima and Zachary Fagenson in Miami; Writing by Frank Jack Daniel; Editing by Frances Kerry)