BRUSSELS (Reuters) - European Union states agreed on Thursday to scrap sanctions against Cuba in a move aimed at encouraging democratic reforms on the Communist island, officials said.

People carry Cuban flags during an event celebrating the 80th birthday of late rebel Ernesto "Che" Guevara at Guevara's Mausoleum in Santa Clara, Cuba, June 14, 2008. REUTERS/Enrique De La Osa

The lifting, agreed despite U.S. calls for the world to remain tough on Havana, will pave the way for a new dialogue with Cuba but come with calls that it address human rights concerns and free political prisoners.

Relations would be reviewed in one year, they said.

“Cuban sanctions will be lifted,” EU External Relations Commissioner Benita Ferrero-Waldner told reporters after foreign ministers of the 27-nation bloc clinched agreement at a summit dinner in Brussels.

“Of course there is clear language on human rights, on the detention of prisoners and there will have to be a review also,” she said of the EU policy arrangements accompanying the move.

The EU measures, which triggered a so-called “cocktail war” over invitations of dissidents and government officials to European embassy receptions, were imposed after a crackdown on dissent in 2003 and include a freeze on high-level visits.

The sanctions were suspended in 2005 but their abolition is an attempt to encourage more reforms by President Raul Castro, who took over after the February 24 retirement of his brother Fidel.

There are about 230 political prisoners in Cuba, according to the illegal but tolerated Cuban Commission for Human Rights.

Unlike the 1962 U.S. embargo, the EU sanctions do not prevent trade and investment. Lifting them will put the EU at odds with Washington’s advocacy of a hard line against Cuba.

“We certainly don’t see any kind of fundamental break with the Castro dictatorship that would give us reason to believe that now would be the time to lift sanctions,” U.S. State Department spokesman Tom Casey said on Thursday.

“We would not be supportive of the EU or anyone else easing those restrictions at this time.”

SPAIN LED

Spain had led the push to drop the sanctions and open a dialogue with Cuba but met resistance from the bloc’s ex-communist members, led by the Czech Republic.

“Countries that had less inclination to lift the measures have asked that, within one year ... the results of political dialogue on human rights be re-evaluated,” Spanish Foreign Minister Miguel Angel Moratinos said.

“What is not going to be re-evaluated is imposing the measures because they have been lifted definitively.”

Of the disparity with U.S. policy he said: “The United States has its policy on Cuba. We don’t share it ... In the end, we have our interests and our autonomy in foreign policy.”

Swedish Foreign Minister Carl Bildt said there would be strict conditions for the move.

“We haven’t softened our approach,” Bildt said. The EU would ask Cuba to improve its human rights record, release political prisoners and high-level EU visitors would also meet opposition figures when appropriate, he said.

Czech Foreign Minister Karel Schwarzenberg stressed: “There are still people in prisons and their situation is terrible.”

A draft of the agreement seen by Reuters urged Cuba to improve human rights, including by releasing unconditionally political prisoners, ratifying U.N. rights conventions and giving humanitarian organizations access to Cuban jails.