Obama pledges Cuba policy change
The frontrunner for his party's nomination for the presidency was speaking to Cuban exiles in Florida.
Mr Obama said he would maintain the Cuban embargo but lift restrictions on travel and sending money to Cuba.
He also said his Republican rival John McCain's hardline stance on Cuba would not advance freedom on the island.
Mr McCain - who has already won the Republican nomination for the White House - earlier criticised Mr Obama of being too soft on Cuba.
Mr Obama told more than 800 Cuban exiles in Miami that President George W Bush's policies towards Havana had been disastrous.
"It is time to pursue direct diplomacy, with friend and foe alike, without preconditions. There will be careful preparation. We will set a clear agenda," the Illinois senator said.
"I would be willing to lead that diplomacy at a time and place of my choosing, but only when we have an opportunity to advance the interests of the United States," added Mr Obama, who once said he would meet Cuban President Raul Castro without preconditions.
In Miami, Mr Obama also said he would overturn the restrictions which Mr Bush imposed on the right of Cuban Americans to travel to Cuba as well as their right to send money to their relatives living on the island.
But Mr Obama said he would maintain the decades-old US embargo on Cuba. Changing that policy could severely limit his chances of winning over Cuban votes, the BBC's Emilio San Pedro says.