Image copyright AFP Image caption The move is the latest in a series of measures to improve relations

Cuban diplomats will now have access to banking services in the US, clearing a major hurdle to restore diplomatic ties between the two counties.

The US State Department declined to the name the bank, but a senior official expressed optimism ahead of Thursday's talks between the US and Cuba.

This week's talks in Washington could be the last round of negotiations before embassies are re-opened.

The US will remove Cuba from its list of sponsors of terrorism on 29 May.

US President Barack Obama announced the historic US thaw with Cuba in December but the US trade embargo against the country remains, and may only be ended by Congress.

Earlier this month, plans were announced to resume ferry services between Florida and Cuba. Charter flights between New York and Havana are also planned.

Despite the new transport links, a Cuba travel ban is still in place for US citizens.