By Stephen Gibbs
BBC News, Havana
Cuba and Panama have restored diplomatic ties a year after they were broken off when Panama's former president pardoned four Cuban exiles.
Castro accused the men of trying to assassinate him
The men had been accused of attempting to assassinate Cuban President Fidel Castro five years ago.
They included Luis Posada Carriles, branded by Cuba as the hemisphere's worst terrorist.
The states restored ties at a ceremony in the Cuban capital attended by Mr Castro and Panama's current president.
Official diplomatic relations were re-established in Havana with the signing of a document by the countries' foreign ministers.
It described a spirit of fraternity that has long linked both nations.
That spirit was briefly broken a year ago, when outgoing Panamanian President Mireya Moscoso pardoned four men in the last days of her office.
Mr Posada Carriles and three other Cuban exiles were in Panama facing jail terms of between seven and eight years after being found innocent of a plot to kill President Castro, but guilty of lesser charges.
Ms Moscoso freed the men on what she said were humanitarian grounds.
She suggested that she feared her leftist successor could extradite the men to Cuba, where they might have faced the death penalty.
Mr Posada Carriles has since emerged in the US.
His extradition is now being sought by Venezuela in connection with the bombing of a Cuban airliner in 1976, in which 73 people were killed.
Cuba, which was once shunned by many of its Latin American neighbours, now has full diplomatic relations with all of them, except for Costa Rica and El Salvador.