"What you are seeing is momentum-building," agreed Geoff Thale, a Cuba specialist at the Washington Office on Latin America (WOLA), a human rights group that has long opposed the trade embargo. "With the policy already under review by the administration, Lugar is creating political space for Obama to take stronger action than he otherwise might."

In an introduction to a staff report he released Monday, Lugar, the ranking Republican and former chairman of the Senate Foreign Relations Committee, said Washington "must recognize the ineffectiveness of our current policy and deal with the Cuban regime in a way that enhances U.S. interests."

"After 47 years... the unilateral embargo on Cuba has failed to achieve its stated purpose of 'bringing democracy to the Cuban people'," Lugar wrote, "while it may have been used as a foil by the regime to demand further sacrifices from Cuba's impoverished population," he noted, adding that the report, entitled 'Changing Cuba Policy - In the United States National Interest', "provides significant insight and a number of important recommendations to advance U.S. interests with Cuba."

The report itself, published on the first anniversary of the transfer of power from former President Fidel Castro to his brother, Raul, and based in part on four-day trip to Cuba by a staff delegation last month, called for the resumption of bilateral talks on drug interdiction and migration, enhanced cooperation on alternative energy development, and easing restrictions on travel and trade.

It also urged Havana's re-integration into western-dominated international institutions, such as the World Bank and the Inter-American Development Bank, among other steps Washington could take as part of process of "sequenced engagement" designed to "develop trust" between the two nations.

Lugar's statement and the report's release come amid growing speculation among Cuba specialists regarding the new administration's intentions. During the presidential campaign, Obama had promised to lift restrictions imposed by former President George W. Bush in 2004 on the freedom of Cuban Americans to travel to the island and to send money to their families there. He also indicated, however that he would retain the trade embargo as leverage to encourage political and democratic reform.

During her confirmation hearings, Secretary of State Hillary Clinton, who had taken a harder line on the embargo during her primary campaign against Obama, said the administration would conduct a review of Cuba policy, but, one month after his inauguration, key officials who would be expected to oversee such a process - including the likely assistant secretary of state for western hemisphere affairs, Georgetown University professor Arturo Valenzuela, and his counterparts on the National Security Council – are not yet in place.

Nonetheless, Obama is expected to formally lift the Cuban-American-related curbs before the scheduled "Summit of the Americas" in Trinidad in mid-April, and possibly by mid-March.

Some observers believe he will combine that move with lifting other curbs on travel, including educational and cultural exchanges that brought thousands of U.S. citizens to the island in the late 1990s, and trade, notably requirements that Cuba pay in cash in advance for agricultural imports from the U.S. imposed by Bush.

"I think he will go beyond the Cuban-American curbs and at least go back to the circumstances (that prevailed) at least at the end of the (Bill) Clinton administration," said William LeoGrande, a Cuba specialist and dean of the School of Government at American University. "Remember, it was a Republican-controlled Senate that approved the sale of food and medicine to Cuba back in 2000, so I don't think there is significant political risk."

In the last several weeks, lawmakers, including Lugar in the Senate, have quietly introduced bills that, if passed, would lift all travel restrictions on trips to Cuba by U.S. citizens, a step that could inflict a decisive blow against the embargo.

Such legislation passed in both the House of Representatives and Senate in 2003 and 2004 but was dropped when Bush threatened to veto the bills. Most Congressional observers believe they are likely to pass again, over the strong objections of the hard-line anti-Castro lobby centred in south Florida and New Jersey, provided that Obama clearly signals his support.

"Much depends on the Obama's attitude," said LeoGrande, who noted that the hard-liners had gained some influence with new Democratic, as well as right-wing Republican, lawmakers in recent years who have accepted campaign funding from the U.S.-Cuba Democracy PAC.

"If he were to say, 'It's time for a change; I support efforts by Congress to end the travel ban, that will give political cover to some who might be a little worried about their vote. But if he says, 'I'm just lifting restrictions for Cuban Americans and I'm not in favour of going much further, then nothing's going to happen."

Obama is likely to get more encouragement from the business community, according to Jake Colvin, vice president of the National Foreign Trade Council (NFTC), an association of several hundred of the large U.S. multi-national companies, which called after Obama's election for the "complete removal of all trade and travel restrictions on Cuba."

Lugar's statement, he said, would be "very positive" for his constituency. "He's been very helpful on unilateral-sanctions reform,, but he's never been out front on Cuba. This shows there's increasing interest on the part of new and important actors in the Congress."

The staff report argued that U.S. interests have been harmed by efforts to isolate Cuba in several ways. Not only has it failed to contribute to the island's democratization, but also in creating tensions with both Latin America and Europe which have chosen a policy of engaging Havana. It recommended that Washington consider establishing a bipartisan commission to forge a new, multilateral strategy on Cuba with Latin America and the European Union.

Indeed, unless Obama moves to relax the embargo before the Trinidad summit, he could suffer political damage in Latin America, according to Erikson. "Latin Americans are not going to view Obama as a change agent if he still has in place the Bush-imposed sanctions on Cuba by the summit," he said.