The U.S. and Cuba are on course to reestablish diplomatic relations, crucial to aiding the island nation's economic and financial situation, Cuban President Raul Castro said Wednesday. (Reuters)

Cuban leader Raul Castro appeared on state television at precisely noon Wednesday to announce the prisoner swap, thanking President Obama and Pope Francis for helping resolve the impasse.

Seated a desk in his military uniform, with portraits of 19th-century Cuban independence heroes as the backdrop, the 83-year-old Castro read a 10-minute written statement in a stern, measured tone. It was a reminder that, at least in style, he is the opposite of his famously long-winded, firebrand older brother, Fidel.

Castro confirmed that he spoke directly to Obama and said the two had come to an agreement on a range of issues “of mutual interest,” including the release of American contractor Alan Gross and the return of three Cuban spies who are revered on the island as anti-terrorism heroes.

“President Obama’s decision deserves the respect and acknowledgment of our people,” Castro said.

He said that Gross’s release was a unilateral decision, not part of an exchange, but that Cuba had also agreed to free additional prisoners at the request of the United States as part of the deal. Castro did not say how many would be freed , but U.S. officials say that 53 political prisoners will be released as part of the agreement.

A difficult history between U.S. and Cuba
More than 50 years after the U.S.-imposed embargo, President Obama has announced an effort to normalize ties with Cuba.

(Kennedy Elliott, Julie Tate and Swati Sharma/Staff reports)

In his speech, Castro also said the two countries had agreed to re-establish diplomatic relations, but that it didn’t mean that “the heart of the matter” — the U.S. trade embargo — “had been solved.”

“The economic, commercial and financial blockade, which causes enormous human and economic damages to our country, must cease,” Castro said, using the Cuban government’s term for the trade sanctions placed on the island by President John F. Kennedy.

Castro said “profound differences” remain between the two countries on issues of sovereignty, democracy, human rights and foreign policy.

Students in the streets of Havana celebrate the announcement by Cuban and American leaders to improve relations. (Reuters)

“The progress made in our exchanges proves that it is possible to find solutions to many problems,” Castro said. “As we have reiterated, we must learn the art of co-existing with our differences in a civilized manner.”