US President George Bush is seeking measures to achieve a transition to democracy in Cuba after 44 years of communist rule.
Secretary of State Colin Powell and Housing Secretary Mel Martinez are to chair a panel that will "plan for the happy day when Castro's regime is no more and democracy comes to the island," Mr Bush said.
"The transition to freedom will present many challenges to the Cuban people and to America, and we will be prepared," he added.
Mr Bush also said the United States would step up enforcement of existing restrictions against the communist regime, such as a ban on tourism by Americans, and crack down on the trafficking of women and children in Cuba.
The United States will also launch a public outreach campaign to identify "the many routes to safe and legal entry" for Cubans who try to flee their homeland, he said.
"We'll increase the number of new Cuban immigrants we welcome every year," Mr Bush added. "We are free to do so, and we will for the good of those who seek freedom."
Scores of Bush supporters from Congress, the Miami community of Cuban exiles and other anti-Castro groups were briefed in advance of the official announcement.
The administration has been signalling for weeks that new steps concerning Cuba were being planned.
Some of Castro's most ardent opponents have criticised the Bush administration for not doing more to bring about democratic change in Cuba.
Mr Powell has been trying to enlist other nations in efforts to bring democracy to Cuba, which has not had a free election since Castro assumed power in 1959.
Castro has dismissed the notion that Cuba needs a transition, contending that the island had one 44 years ago.
The head of Cuba's diplomatic mission in Washington, Mr Dagoberto Rodriguez, said that Mr Bush should "stop acting like a lawless cowboy" and "start listening to the voices of the nations of the world."
Canada expressed concern at Mr Bush's announcement. Ottawa has for decades ignored a US trade embargo on Cuba to pour in millions of aid dollars and encourage Canadian firms to help revitalise the economy. Bilateral trade in 2001 was worth C$756 million ($575 million).
"There are many Canadian companies active in Cuba with investments there, with employees there," Industry Minister Allan Rock told reporters when asked about Mr Bush's comments.
"My concern would be - working with the minister of foreign affairs - that nothing occur which would impede their ability to carry out business and serve the interests of their shareholders," he said.
Agencies