By Anthony Boadle
HAVANA (Reuters) - Ailing Cuban leader Fidel Castro steppeddown on Tuesday 49 years after taking power in an armedrevolution, closing the book on a Cold War career that made himan icon to leftists and a tyrant to his foes.
Castro, 81, who has not appeared in public since undergoingstomach surgery almost 19 months ago, said he would not seek anew term as president or as leader of Cuba's armed forces whenthe National Assembly meets on Sunday.
His retirement raised expectations for change on thecommunist island -- and calls for democracy by Castro'sarch-enemy, the United States -- but Cuba experts said limitedeconomic reforms were more likely than swift politicaltransformation.
"I will not aspire to or accept -- I repeat not aspire toor accept -- the positions of president of the Council of Stateand commander-in-chief," Castro said in a statement publishedin the Communist Party's Granma newspaper.
U.S. President George W. Bush, who has tightened thedecades-old economic embargo against Castro's government, saidhis retirement should begin a democratic transition.
"Eventually this transition ought to lead to free and fairelections. And I mean free and I mean fair," Bush said inRwanda during a tour of Africa.
Cuba's National Assembly, a rubber-stamp legislature, isexpected to nominate Castro's brother and designated successorRaul Castro, 76, as president. The defence minister has beenrunning the country since emergency surgery forced his olderbrother to delegate power on July 31, 2006.
Raul Castro has promoted more open debate about thestate-run economy's failings but is unlikely to make boldpolitical changes to the one-party state. Fidel Castro willremain influential as first secretary of the ruling CommunistParty.
"This is a crucial moment. Cuba wants change, the peoplewant change," said Oswaldo Paya, Cuba's best-known dissident.
Frank Mora, a political scientist at the National WarCollege in Washington, said Castro's successors will likely beforced to head down paths he would not approve. "He will not gointo some sunset nor will he become that crazy uncle in theattic, but they are pushing him up those stairs," Mora said.
IN CUBA, SOME SADNESS, NO SURPRISE
Residents on the quiet streets of Havana reacted withoutsurprise, some with sadness, to Castro's retirement, firstannounced on Granma's Web site in the middle of the night.
Castro has looked frail in his few videotaped appearancesin the months since the first news that he was too weak torule.
"The Revolution will continue. Fidel resigned in time. Itis a wise decision. He let Cubans get used to his absence,"said Lazaro, a building administrator sweeping a lobby inslippers.
In Miami, the heartland of exiled opposition to the Castrobrothers, reaction was subdued, in contrast to celebrationsafter the 2006 announcement of his illness.
"It's very good that Fidel resigns. But if Fidel dies, it'sbetter," said Juan Acosta, who left Cuba in 1980, as he stoppedto buy a newspaper in Miami's Little Havana neighbourhood.
"This is a succession from one tyrant to another. Weshouldn't kid ourselves, while Fidel is alive, he's running theshow," Cuban-born U.S. Commerce Secretary Carlos Gutierrez,said in an interview with Reuters.
The Democrats vying to represent their party in theNovember U.S. election, Sens. Hillary Clinton and Barack Obama,suggested they might lift the trade embargo if Cuba pursueddemocratic reforms. Republican front-runner John McCain saidthe United States must keep up the pressure.
European governments said Castro's retirement could openthe door to democratic change.
CHARISMATIC GUERRILLA
The charismatic Castro led the bearded and cigar-chompingguerrillas who overthrew U.S.-backed dictator Fulgencio Batistain 1959. He then turned Cuba into a communist state onWashington's doorstep and became the world's longest-servinghead of state, barring monarchs.
"Fidel will always be at the vanguard, people like Fidelnever retire," said Venezuela's socialist President HugoChavez, a personal friend of Castro whose country has replacedthe Soviet Union as Cuba's main benefactor.
Castro survived a CIA-backed invasion by Cuban exiles atthe Bay of Pigs in 1961, as well as assassination attempts, theU.S. embargo, and an economic crisis in the 1990s after thecollapse of Soviet bloc communism.
He also played a role in taking the world to the brink ofnuclear war in 1962 when he let Moscow put ballistic missilesin Cuba, leading to a 13-day stand-off between U.S. PresidentJohn F. Kennedy and Soviet Premier Nikita Khrushchev.
Famous for long speeches delivered in green militaryfatigues, Castro is admired in the developing world forstanding up to the United States but considered by opponents adictator who suppressed freedom and wrecked Cuba's economy.
His retirement reminded investors of future windfalls onthe biggest island in the Caribbean after the embargo ends,from more tourism to potentially ballooning nickel and cigarexports.
Stock in Canada's Sherritt International, the largestforeign investor in Cuba with nickel mining and oil and gasoperations, rose as much as 6 percent to C$15.57 on Tuesday.
Cuba's leadership has showed no sign of collapse.
"Fortunately, our Revolution can still count on cadres fromthe old guard and others who were very young in the earlystages of the process," Castro said in Tuesday's statement. Hewill continue to write his newspaper columns.
"This is not my farewell to you. My only wish is to fightas a soldier in the battle of ideas ... It will be just anotherweapon you can count on. Perhaps my voice will be heard."
(Additional reporting by Rosa Tania Valdes in Havana,Deborah Charles in Rwanda, Andy Sullivan, Sue Pleming andAdriana Garcia in Washington, Daniel Trotta in New York; FrankJack Daniel in Caracas and Michael Christie, Jim Loney and TomBrown in Miami; Editing by Alan Elsner)
