WASHINGTON (Reuters) - President Barack Obama opened a crack on Monday in a decades-old U.S. embargo against communist Cuba, allowing U.S. telecommunications firms to start providing service for Cubans and lifting restrictions on family ties to the island.

In a major shift from the Bush administration’s more hard-line approach to Havana, Obama ended limits on family travel and money transfers by Cuban Americans in the United States to Cuba.

The decisions unveiled by the White House do not eliminate Washington’s trade embargo against Cuba set up 47 years ago, but it does hold out the prospect for improving relations between the two longtime foes.

“The president has directed that a series of steps be taken to reach out to the Cuban people to support their desire to enjoy basic human rights,” White House spokesman Robert Gibbs told reporters. “These are actions he has taken to open up the flow of information.”

Administration officials said Obama hoped the new measures would encourage Cuba’s one-party state to implement democratic reforms long demanded by Washington as a condition for removing sanctions imposed after Fidel Castro took power in 1959.

Shares of companies that stand to gain from a thaw in U.S. ties with Cuba soared on the news, led by Canadian mining and energy company Sherritt International, a major player in Cuba’s nickel and oil industry, whose stock rose 24.5 percent.

Miami-based cruise operator Royal Caribbean also saw its shares rise on hopes that the No. 2 cruise ship operator and rival Carnival, could sail to Cuba, just 90 miles from the United States.

U.S. telecommunications companies will now be allowed to set up fiber-optic cable and satellite links with Cuba, start roaming service agreements and permit U.S. residents to pay for telecoms, satellite radio and satellite television services provided to individuals in Cuba, the White House said.

Signaling prospects for further gestures, Obama also directed his government to look at starting regularly scheduled commercial flights to Cuba. Air travel between the United States and Cuba is limited to charter flights at present.

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While they insistently call for an end to the U.S. embargo, Cuba’s leaders have in the past reacted with caution and suspicion to initiatives presented by Washington as seeking to “open up” Cuba’s political system.

Havana rejects arguments that it needs Western-style democracy and has resisted as “subversive” past U.S. efforts to channel funds and communications equipment to dissidents and independent journalists on the island.

PRAISE AND CRITICISM

Supporters of easing U.S. sanctions against Cuba hailed the family-related policy changes, which will affect an estimated 1.5 million Americans who have relatives in Cuba.

They voiced hope it would lead to even bolder steps by Obama to dismantle the trade embargo, which critics argue is an obsolete policy that has failed to foster change in Cuba despite being maintained by successive U.S. administrations.

But conservative critics of Obama’s strategy said it would provide an increased cash flow to help prop up Cuba’s communist government.

Obama had promised in the presidential campaign to allow Cuban Americans to travel more freely to Cuba and increase financial help to family members, but insisted he would not end the trade embargo until Cuba showed progress toward democracy.

Obama’s gesture appeared intended to signal a new attitude toward both Cuba and other Latin American countries that have pressed Washington to end a trade embargo that has sought to isolate Havana for more than four decades.

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It also comes ahead of Obama’s attendance at a Summit of the Americas in Trinidad later this week.

Cuba is among the U.S. foes Obama has said he would be willing to engage diplomatically, instead of shunning them as his predecessor George W. Bush did.

“I enthusiastically applaud this, it is ground breaking ...

... I sincerely hope that this is the beginning of even more relaxation,” said Silvia Wilhelm, executive director of the Miami-based Cuban American Commission for Family Rights.

Until now, Cubans living in the United States had been allowed to travel to the island only once a year and were limited to send only $1,200 per person in cash to needy family members in Cuba.

Obama faced some resistance in Congress, especially from opposition Republicans.

“President Obama has committed a serious mistake by unilaterally increasing Cuban-American travel and remittance dollars for the Cuban dictatorship,” said Lincoln Diaz-Balart and Mario Diaz-Balart, both U.S. lawmakers for Florida, home to the largest Cuban exile community in the United States.

The two congressmen accused Obama of violating a broad pledge he made at his inauguration in January to “extend a hand” to autocratic rulers around the world on the condition they relaxed their grip on power and opened up to democracy.

At Havana airport, for decades the scene of tearful departures and reunions for families separated by politics and exile, Cubans were overjoyed with Obama’s measures.

“This is the most beautiful thing that could happen,” said 60-year-old Pablo, saying goodbye to his daughter who was returning to Miami. “If Obama does this, all of us will be able to get together. The family is what matters.”