President Fidel Castro today said the United States had no choice but to accept the flood of Cuban refugees and told Cubans to prepare for a U.S. naval blockade. He also announced the formation of a new paramilitary force.

Castro, who leads the nonaligned movement, also called on nonaligned countries and the Organization of Petroleum Exporting countries to prevent a U.S. economic blockade of Iran.

Although the United States canceled military maneuvers at Guantanamo Base in Cuba Wednesday, Castro broke the news today to more than 1 million people gathered on Revolution Square. Castro first let every Cuban and foreign speaker at the meeting assail the U.S. maneuvers. Then he announced the cancelation, describing it as a "victory for the people," who responded with loud cheers and applause.

Until today, the Cuban leadership had used the planned U.S. maneuvers as a rallying point for national unity at a time of internal political and economic difficulties.

But privately, Castro was known to be deeply worried by the maneuvers.

The exercises, which were to be considerably larger than last fall's landing on Guantanamo, were seen here as part of what one official described in an interview as "the growing militaristic mood" in the United States.

The aborted attempted to rescue American hostages in Iran last week heightened Cuban fears that the United States would feel compelled to flex it muscles and escalate its "threat" against Cuba.

"The difference between psychological warfare and real warfare is a very tenouous line," the official said.

Cuban officials who had known about State Department efforts to change the site of the manuevers were reportedly pleased with the U.S. decision.

In exchange, the United States is known to expect a conciliatory gesture from Havana. This may involve ending the chaotic dispatch of refugees -- including a growing number of common criminals -- and permitting a controlled airlift to Miami.

But Castro did not publicly make any gesture toward Washington. Instead he said the Unted States, particularly the Central Intelligence Agency, had provoked the refugee exodus to Florida and now it had "no choice but to swallow the dagger whole."

"What did they think they would get, intellectuals, artists, engineers?" Castro asked.

Castro also referred to Republican presidential candidate Ronald Reagan's threat to invade Cuba and warned that Cubans should be alert and prepare for a contingency including a U.S. naval blockade.

Besides the already existing militia, he waid the Army will creat new regional paramilitary defense force, made up of workers and peasants to help defend the country.

The traditional May 1 festivities here have been designed as a giant anti-American jamboree. All week, newspapers have been whipping up anti-American sentiment and in recent days, protest meetings against the planned U.S. maneuvers have been held all over the country.

European and Latin American diplomats who last week were extremely critical of Washington talked about the suspension of the military exercise on and around Cuba as a "timely," "necessary" and "brilliant" move.

"The Americans were behaving like a water buffalo in full charge," a senior Western diplomat said. "At last they have done something imaginative."

A Latin American ambassador who had criticized Washington last week for "playing into Castro's hands by losing its cool over the refugee problem" said, "Fidel Castro has an old mistress called America; he knows all her weaknesses and her ingenuity. At last she has played one of her own tricks."

U.S. diplomats in the region are known to have pressed for the suspension of the maneuvers for some time, arguing that they would be harmful to U.S. objectives in the area.

These diplomats believe that promoting Cuba's anti-American passions would only serve to escalate tension in the area and promote militarism instead of liberalization in Cuba.