President Bush said he hopes the resignation signals the beginning of a democratic transition, though he doubts that would come about under the rule of another Castro. The State Department denigrated the change as a ''transfer of authority and power from dictator to dictator light."
Castro temporarily ceded his powers to his brother on July 31, 2006, when he announced that he had undergone intestinal surgery. Since then, he has not been seen in public, appearing only sporadically in official photographs and videotapes and publishing dense essays about mostly international themes as his younger brother consolidated his rule.
''My wishes have always been to discharge my duties to my last breath," Castro wrote in a letter published Tuesday in the online edition of the Communist Party daily Granma. But ''it would be a betrayal to my conscience to accept a responsibility requiring more mobility and dedication than I am physically able to offer."
In the pre-dawn hours, most Cubans were unaware of Castro's message, and Havana's streets were quiet. It wasn't until 5 a.m., several hours after it was posted on the internet, that official radio began reading the news to early risers.
As the news across the island, Cubans went about their business as usual, accepting the inevitable with a mix of sadness and hope.
''It is like losing a father," said Luis Conte, an elderly museum watchman. Or ''like a marriage - a very long one that is over."
Cuban dissidents welcomed the news as a possible first step toward change.
''The change of a person does not signify the change of a system," said Oswaldo Paya, whose pro-democracy Varela Project sought an unsuccessful referendum on civil rights and electoral reforms. ''We have always maintained hope and today we are more hopeful."
Reaction was subdued in Miami's exile community. Dozens gathered in Little Havana, where motorists honked horns, but reporters nearly outnumbered the revelers who shouted ''Free Cuba!" and sold little flags.
In Washington, the government said it had no plans to change U.S. policy or lift its embargo on Cuba.
Bush, traveling in Rwanda, pledged to ''help the people of Cuba realize the blessings of liberty." But he implied that wasn't likely under Raul Castro.
''The international community should work with the Cuban people to begin to build institutions that are necessary for democracy," he said. ''Eventually, this transition ought to lead to free and fair elections - and I mean free, and I mean fair - not these kind of staged elections that the Castro brothers try to foist off as true democracy."
If Cuba remains much the same, ''political prisoners will rot in prison and the human condition will remain pathetic in many cases," Bush said.
The United States built a detailed plan in 2005 for American assistance to ensure a democratic transition on the island of 11.2 million people after Castro's death. But Cuban officials have insisted that the island's socialist political and economic systems will outlive Castro.
''The adversary to be defeated is extremely strong," Castro wrote Tuesday. ''However, we have been able to keep it at bay for half a century."
Peter Kornbluh, senior analyst at George Washington University's National Security Archive, said the resignation will allow the next U.S. president to adopt a totally new approach toward dialogue and civil relations with a post-Fidel Cuba.
''Fidel Castro's resignation does present a true opportunity to revisit a U.S. policy of perpetual antagonism towards Cuba, even though the current U.S. president is unlikely to make any changes in a hostile position towards Cuba," he said.
Castro has been Cuba's unchallenged leader since 1959. Monarchs excepted, he was the world's longest ruling head of state.
There had been widespread speculation about whether he would continue as president when the new National Assembly meets Sunday to pick the country's top leadership, the Council of State which will be headed by the new Cuban president. Castro said Cuban officials had wanted him to remain in power after his surgery.
''It was an uncomfortable situation for me vis-a-vis an adversary that had done everything possible to get rid of me, and I felt reluctant to comply," he said in a reference to the United States.
Castro remains a member of parliament and is likely to be elected to the 31-member Council of State on Sunday, though he will no longer be its president. He also retains his powerful post as first secretary of Cuba's Communist Party.
The resignation opens the path for Raul Castro's succession to the presidency, and the full autonomy he has lacked in leading a caretaker government.
The younger Castro has raised expectations among Cubans for modest economic and other reforms, saying last year that the country requires unspecified ''structural changes" and acknowledging that government wages averaging about $19 a month do not meet basic needs.
As first vice president of Cuba's Council of State, Raul Castro was his brother's constitutionally designated successor and appears to be a shoo-in for the presidential post when the council meets Sunday. More uncertain is who will be chosen as Raul's new successor, although 56-year-old council Vice President Carlos Lage, who is Cuba's de facto prime minister, is a strong possibility.
Castro rose to power on New Year's Day 1959 and reshaped Cuba into a communist state 90 miles from U.S. shores.
The fiery guerrilla leader survived assassination attempts, a CIA-backed invasion and a missile crisis that brought the world to the brink of nuclear war. Ten U.S. administrations tried to topple him, most famously in the disastrous Bay of Pigs invasion of 1961.
His ironclad rule ensured Cuba remained communist long after the breakup of the Soviet Union and the collapse of communism across Eastern Europe.
Castro's supporters admired his ability to provide a high level of health care and education for citizens while remaining fully independent of the United States. His detractors called him a dictator whose totalitarian government systematically denied individual freedoms and civil liberties such as speech, movement and assembly.
The United States was the first country to recognize Castro's government, but the countries soon clashed as Castro seized American property and invited Soviet aid.
On April 16, 1961, Castro declared his revolution to be socialist. A day later, he defeated the CIA-backed Bay of Pigs invasion. The United States squeezed Cuba's economy and the CIA plotted to kill Castro. Hostility reached its peak with the 1962 Cuban missile crisis.
The collapse of the Soviet Union sent Cuba into economic crisis, but the economy recovered in the late 1990s with a tourism boom.