Cuba on Thursday celebrates the 50th anniversary of its revolution with its iconic leader Fidel Castro withdrawn from power, still at odds with the United States and facing new economic challenges.

Fifty year festivities, led by President Raul Castro (77), who officially took over from his older brother in February, were due to centre on Santiago de Cuba — the southeastern city from where the revolution began.

It was unclear how 82-year-old Fidel, who has not appeared in public since undergoing major surgery almost two and a half years ago, would participate.

Leftist Bolivian President Evo Morales has pulled out of the party and it was also unclear whether Venezuelan President Hugo Chavez, who considers himself Fidel Castro's "spiritual son," would attend.

"Celebrations won't be as grandiose as we had wished due to the economic situation," a Cuban official told AFP, requesting anonymity.

A 32-year-old Fidel Castro announced the start of the revolution in the island's second city after the victory of a 25-month guerrilla war over dictator Fulgencio Batista.

The communist revolution — also led by legendary Argentine guerrilla Ernesto "Che" Guevara — took on Marxist overtones in May 1961, one month after the attempted invasion of the Bay of Pigs by CIA-backed Cuban exiles.

Former US president John F. Kennedy declared an embargo in February 1962, before the Soviet missile crisis, which almost set off nuclear war.

US president-elect Barack Obama, due to take power on 20 January has, however, promised to soften the 46-year-old embargo, and Raul Castro has said he is ready for talks without "carrot or stick" with Obama.

Changes on hold

The Cuban president has also promised "structural reforms" — a departure from his older brother and leading members of the communist old guard.

The Cuban Communist Party is split between backers of the status quo who, like Fidel, refuse to loosen the regime's tight controls, and pragmatists pushing for a Chinese-style, controlled opening up of the economy.

But Raul's promised changes have taken a back seat to the global economic crisis as the president signalled in July, when he announced greater government control of revenues and tighter management of agriculture.

"It's my duty to speak frankly, because it would be unethical to create false expectations," he said after telling Cubans to expect tough economic times from spiralling international fuel and food prices.

On Saturday, the president called for new government spending cuts, but assured Cubans the economic and social reforms he had promised "have not been shelved".

The Caribbean island, also battered by three hurricanes in 2008, causing $10-billion in damage — equivalent to 20 percent of Cuba's gross national product — no longer manages to meet its debt repayments.

It is still officially in the Special Period in Peacetime, an extended period of economic crisis that began in 1991 after the collapse of its main backer, the Soviet Union.

Although the island of 11.2 million people has since found new partners, particularly oil-rich Venezuela, life remains difficult for most Cubans who earn an average of $20 per month and survive due to a parallel economy.

Branded US puppets by Havana, Cuban dissidents, divided and without a leader, say there are 219 "political prisoners" on the island.

During his decades in power, Fidel Castro expropriated foreign companies, jailed his political enemies and drove some two million Cubans into exile.

But he also introduced historic reforms, including major education and health advancements that raised the island nation to the level of leading western countries.

AFP