By Daniel Trotta and Dave Sherwood
HAVANA, March 13 (Reuters) - Cuba has opened talks with the U.S. government, President Miguel Diaz-Canel said on Friday, as an oil blockade imposed by U.S. President Donald Trump pushes the Communist-run nation deeper into economic crisis.
"These talks have been aimed at finding solutions through dialogue to the bilateral differences we have between the two nations," Diaz-Canel said in a video aired on state television.
Diaz-Canel said he hoped the negotiations would move the two long-time rivals "away from confrontation."
Cuba is growing increasingly desperate. The Caribbean nation's citizens, already exhausted by years of economic crisis and shortages, now live the majority of their days without electricity. Rising prices, strictly rationed fuel and medicine shortages have pushed many to the breaking point.
Since the U.S. captured Venezuelan President Nicolas Maduro and removed from power Cuba's most important foreign benefactor in January, Trump has cut off Venezuelan oil shipments to Cuba and threatened to slap tariffs on any country that sells oil to Cuba.
Trump in recent weeks had made a series of statements, saying Cuba was on the verge of collapse or eager to make a deal with the United States. On Monday he said Cuba may be subject to a "friendly takeover," then added, "it may not be a friendly takeover."
"As the President stated, we are talking to Cuba, whose leaders should make a deal, which he believes 'would be very easily made'," a White House official said, on condition of anonymity.
"Cuba is a failing nation whose rulers have had a major setback with the loss of support from Venezuela and with Mexico ceasing to send them oil," the official said, in an emailed statement.
Cubans on the streets of Havana welcomed the news as a possible solution to the power blackouts, which this week provoked protests in which Reuters observed Havana residents banging on kitchen pots in the dark.
"We are already overwhelmed, we can't take this situation anymore, and I think that this conversation between Cuba and the United States should lead to a better situation," said Yaimi Gonzalez, a 44-year-old homemaker.
NO FUEL ENTERED CUBA FOR THREE MONTHS
Cuba said it was interested in conducting the talks "on the basis of equality and respect for the political systems of both states, and for the sovereignty and self-determination of our governments," Diaz-Canel said.
But he made clear in his remarks on Friday that the oil blockade was taking its toll.
No fuel has entered Cuba in three months, Diaz-Canel said in a subsequent press conference with the Cuban media on Friday, resulting in a decline in diesel and fuel oil reserves that have made Cuba's electrical grid increasingly "unstable," he said.
A blackout last week plunged the majority of the island's citizens into darkness, and outages since then have spiked to over 12 hours daily across most of the capital Havana.
Diaz-Canel described Cuba's efforts to increase the island's energy independence amid ongoing talks with the United States, saying Cuba had increased production of domestic crude and gas thus far this year, and was set to boost solar generation by 10% by the end of March.
In a statement recorded Thursday night among high-level officials of the Communist Party, Diaz-Canel said he was directing the talks for the Cuban side, together with former Cuban President Raul Castro and other officials. He did not say who had participated for the United States, nor did he say when or where they had taken place.
Trump has said U.S. Secretary of State Marco Rubio was involved.
The talks were in their initial stages and Cuba was willing to continue them, Diaz-Canel said. One goal was to determine if there was will on both sides to reach an agreement, he said.
Felipa Rodriguez, a 67-year-old retiree, said it was important that Cuba stick to its principles.
"If the talks are going to be friendly and Cuba doesn't have to give ground politically, there's no problem at all," Rodriguez said.
CUBA RELEASED PRISONERS AFTER VATICAN DEAL
Trump has said repeatedly that the United States was already in high-level talks with Cuban representatives. Until now, the Cuban government had denied that any official encounters were underway but had not explicitly denied media reports of back-channel discussions with Raul Guillermo Rodriguez Castro, the grandson of Raul Castro, who is 94 and still wields great influence.
Rodriguez Castro was seated behind Diaz-Canel and among the Communist Party officials pictured in the video, an unusual appearance given that he does not officially hold a high-level position within the party. The Castro grandson, 41, widely known as "El Cangrejo," or "The Crab," also attended the press conference on Friday morning.
In the past, the Vatican has served as mediator in talks between the two nations, as in the case of 2014 negotiations that led to rapprochement between Cuba and the United States during the presidency of Barack Obama.
On the eve of Friday's announcement, Cuba separately said it will release 51 prisoners in the coming days under an agreement with the Vatican. The prisoner release comes two weeks after Foreign Minister Bruno Rodriguez met with Pope Leo in the Vatican.
Diaz-Canel said the decision to release the prisoners was "sovereign" and not "imposed by another country."
(Reporting by Daniel Trotta and Dave Sherwood in Havana; Additional reporting by Matt Spetalnick in Washington and Alien Fernandez and Anett Rios in Havana; Editing by Lincoln Feast, Toby Chopra and Chizu Nomiyama)
