Washington - US President Barack Obama on Monday lifted all restrictions on Cuban Americans travelling and sending money back to their home country as part of a much-anticipated reversal of US policies toward Cuba.

In an executive order, Obama will also expand communications links and allow more humanitarian donations to be sent to Cuba in what the White House billed as an effort to encourage a democratic transition on the Communist island.

"Creating independence, creating space for the Cuban people to operate freely from the regime is the kind of space they need to start the process toward a more democratic Cuba," said Dan Restrepo, a senior White House advisor for the western hemisphere.

The shift does not mark an end to the US' trade embargo against Cuba, which has been in place since the 1960s, and keeps in place travel restrictions for most non-Cuban Americans. Legislation to end broader travel limits has been introduced in Congress but will face resistance from US lawmakers that remain steadfastly opposed to relaxing the embargo.

The new policy does lift nearly all restrictions on the more than 1 million Cuban-Americans who still have family members on the Caribbean island just off the coast of Florida.

"The United States is getting out of the business of regulating the relationship between Cuban families," said Restrepo, and called on the Cuban government to do the same.

US telecommunications companies will also be allowed to reach agreements to provide fiber-optic cables and satellite communications in Cuba. The White House said expanding communications within the island could help open up Cuban society.

"We want to increase the flow of information among Cubans and between Cubans and the outside world," Restrepo said.

Obama has in the past signalled he wants to improve ties with Cuba and advocated relaxing travel restrictions during the 2008 presidential campaign.

The White House also sees an opportunity to influence Cuba since Raul Castro took over as president from his brother Fidel in February 2007.

Human Rights Watch welcomed the announcement but urged the US to relax travel for all Americans and work more closely with the international community.

"If President Obama is serious about promoting change in Cuba, this executive order must be part of a larger shift away from the US unilateral approach toward the Cuban government," said Jose Miguel Vivanco, Americas director at the rights group. "Only by working with its allies in Latin American and Europe will the US be able to chip away at Castro's repressive machinery."

But supporters of the embargo have argued that easing the restrictions could put money in the hands of the Cuban government and help keep the Communist regime alive.

"Given these changes will benefit the regime in Havana, it would be wise in the implementation to place some reasonable limits on this type of travel and the amounts that can be sent to Cuba," said Republican Florida Senator Mel Martinez, himself a Cuban-American.

The policy shift was announced by the White House just days before Obama's trip to a summit of North and South American leaders in Trinidad and Tobago.

Cuban officials will not be attending the gathering, but how to deal with the Communist island will be one of the central issues for the western hemisphere leaders.

Obama's changes also mark a shift from the more hardline stance of former president George W Bush, who in 2004 limited visits by Cuban- Americans to once every three years, for no more than two weeks, and excluded extended family, such as aunts, uncles and cousins.

Those restrictions were lifted temporarily last month by the US Congress, which cut off all funding for enforcing the travel limits until September.