(Adds U.S. commerce secretary, investors)
By Anthony Boadle
HAVANA, Feb 19 (Reuters) - Ailing Cuban leader Fidel Castro stepped down on Tuesday 49 years after taking power in an armed revolution, closing the book on a Cold War career that made him an icon to leftists and a tyrant to his foes.
Castro, 81, who has not appeared in public since undergoing stomach surgery almost 19 months ago, said he would not seek a new term as president or as leader of Cuba’s armed forces when the National Assembly meets on Sunday.
His retirement raised expectations for change on the communist island -- and calls for democracy by Castro’s arch-enemy, the United States -- but Cuba experts said limited economic reforms were more likely than swift political transformation.
“I will not aspire to or accept -- I repeat not aspire to or accept -- the positions of president of the Council of State and commander-in-chief,” Castro said in a statement published in the Communist Party’s Granma newspaper.
U.S. President George W. Bush, who has tightened the decades-old economic embargo against Castro’s government, said his retirement should begin a democratic transition.
“Eventually this transition ought to lead to free and fair elections. And I mean free and I mean fair,” Bush said in Rwanda during a tour of Africa.
Cuba’s National Assembly, a rubber-stamp legislature, is expected to nominate Castro’s brother and designated successor Raul Castro, 76, as president. The defense minister has been running the country since emergency surgery forced his older brother to delegate power on July 31, 2006.
Raul Castro has promoted more open debate about the state-run economy’s failings but is unlikely to make bold political changes to the one-party state. Fidel Castro will remain influential as first secretary of the ruling Communist Party.
“This is a crucial moment. Cuba wants change, the people want change,” said Oswaldo Paya, Cuba’s best-known dissident.
Frank Mora, a political scientist at the National War College in Washington, said Castro’s successors will likely be forced to head down paths he would not approve. “He will not go into some sunset nor will he become that crazy uncle in the attic, but they are pushing him up those stairs,” Mora said.
Residents on the quiet streets of Havana reacted without surprise, some with sadness, to Castro’s retirement, first announced on Granma’s Web site in the middle of the night.
Castro has looked frail in his few videotaped appearances in the months since the first news that he was too weak to rule.
“The Revolution will continue. Fidel resigned in time. It is a wise decision. He let Cubans get used to his absence,” said Lazaro, a building administrator sweeping a lobby in slippers.
In Miami, the heartland of exiled opposition to the Castro brothers, reaction was subdued, in contrast to celebrations after the 2006 announcement of his illness.
“It’s very good that Fidel resigns. But if Fidel dies, it’s better,” said Juan Acosta, who left Cuba in 1980, as he stopped to buy a newspaper in Miami’s Little Havana neighborhood.
“This is a succession from one tyrant to another. We shouldn’t kid ourselves, while Fidel is alive, he’s running the show,” Cuban-born U.S. Commerce Secretary Carlos Gutierrez, said in an interview with Reuters.
The Democrats vying to represent their party in the November U.S. election, Sens. Hillary Clinton and Barack Obama, suggested they might lift the trade embargo if Cuba pursued democratic reforms. Republican front-runner John McCain said the United States must keep up the pressure.
European governments said Castro’s retirement could open the door to democratic change.
The charismatic Castro led the bearded and cigar-chomping guerrillas who overthrew U.S.-backed dictator Fulgencio Batista in 1959. He then turned Cuba into a communist state on Washington’s doorstep and became the world’s longest-serving head of state, barring monarchs.
Castro survived a CIA-backed invasion by Cuban exiles at the Bay of Pigs in 1961, as well as assassination attempts, the U.S. embargo, and an economic crisis in the 1990s after the collapse of Soviet bloc communism.
He also played a role in taking the world to the brink of nuclear war in 1962 when he let Moscow put ballistic missiles in Cuba, leading to a 13-day stand-off between U.S. President John F. Kennedy and Soviet Premier Nikita Khrushchev.
Famous for long speeches delivered in green military fatigues, Castro is admired in the developing world for standing up to the United States but considered by opponents a dictator who suppressed freedom and wrecked Cuba’s economy.
His retirement reminded investors of future windfalls on the biggest island in the Caribbean after the embargo ends, from more tourism to potentially ballooning nickel and cigar exports.
Stock in Canada’s Sherritt International, the largest foreign investor in Cuba with nickel mining and oil and gas operations, 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 from the old guard and others who were very young in the early stages of the process,” Castro said in Tuesday’s statement. He will continue to write his newspaper columns.
“This is not my farewell to you. My only wish is to fight as a soldier in the battle of ideas ... It will be just another weapon 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 and Adriana Garcia in Washington, Daniel Trotta in New York and Michael Christie, Jim Loney and Tom Brown in Miami; Editing by Patricia Zengerle)