Panama City (AFP) - US President Barack Obama told a summit of Latin and North American leaders on Saturday that his Cuba policy shift marks a "turning point" for the region.

Addressing the Summit of the Americas in Panama City, which Cuban President Raul Castro was attending for the first time, Obama said: "This shift in US policy represents a turning point for our entire region."

"The fact that President Castro and I are both sitting here today marks a historic occasion," he said.

But the US leader acknowledged that the two countries, as they negotiate to restore diplomatic relations that broke in 1961, will continue to have disagreements.

"I think it's no secret, President Castro I'm sure would agree, that there will continue to be significant differences between our two countries," he said.

"We will continue to speak out on behalf of universal values that we think are important. I'm sure President Castro will continue to speak out on the issues he thinks are important."