Bells tolled in celebration and teachers halted lessons midday as President Raul Castro told his country Wednesday that Cuba was restoring relations with the United States after more than a half-century of hostility.

Wearing his military uniform with its five-star insignia, the 83-year-old leader said the two countries would work to resolve their differences "without renouncing a single one of our principles."

Havana residents gathered around television sets in homes, schools and businesses to hear the historic national broadcast, which coincided with a statement by U.S. President Barack Obama in Washington. Uniformed schoolchildren burst into applause at the news.

At the University of San Geronimo in the capital's historic center, the announcement drew ringing from the bell tower. Throughout the capital, there was a sense of euphoria as word spread.

"For the Cuban people, I think this is like a shot of oxygen, a wish-come-true, because with this, we have overcome our differences," said Carlos Gonzalez, a 32-year-old IT specialist. "It is an advance that will open the road to a better future for the two countries."

Guillermo Delgado, a 72-year-old retiree, welcomed the announcement as "great news."

"It is a victory for Cuba because it was achieved without conceding basic principles," Delgado said. "For Obama, I think it's a spectacular step. ... All countries should change this irrational policy."

Castro's brother, Fidel, led the 1959 rebellion that toppled the dictatorship of Fulgencio Batista. The U.S. initially recognized the new government but broke relations in 1961 after Cuba veered sharply to the left and nationalized U.S.-owned businesses.

In his address, Castro called on Washington to end its trade embargo against the island which, he said, "has caused enormous human and economic damage."

Cuba is willing to discuss the great differences that remain on matters of national sovereignty, democracy and internal policies, he said. "We should learn the art of living together in a civilized manner in spite of our differences."

Castro thanked the Vatican, "especially Pope Francis," and the Canadian government for helping facilitate the secret negotiations between the U.S. and Cuba.

On the streets of Havana, 67-year-old Maite Fontana cheered Castro's words.

"Wow," she said. "It's a gesture of good will by both sides."

Diego Moreno, 58, said it was more than he'd expected.

"Finally, the reason and sensibility of both countries has triumphed."