Ailing Cuban leader Fidel Castro, who ruled the Caribbean island nation for nearly half a century, announced Tuesday that he is stepping down as president, prompting calls from Canada and the U.S. for a new era of political and economic reform.

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Cubans on their way to work pass by a huge poster depicting Fidel Castro on Tuesday morning, the day he announced he would be stepping down as leader for good. ((Adalberto Roque/AFP/Getty Images.)

In a written statement, published on the official Communist party's website Granma, Castro said he would not accept a new term as president when the newly elected parliament meets on Sunday.

His resignation effectively ends the longest rule in the world for a head of government. Raul Castro, acting president since July 31, 2006, is expected to take over permanently.

"I will not aspire nor accept, I repeat, I will not aspire nor accept — the post of president of the council of state and commander in chief," read the letter signed by the 81-year-old Fidel Castro.

Although there has been much speculation about his position as leader since he fell ill, there had been no warning of Castro's plan to permanently give up power.

The new National Assembly meets Sunday for the first time since January elections to pick the governing council of state, including the presidency Castro holds. Raul Castro, who is first vice-president of Cuba's Council of State, is the constitutionally designated successor.

'Betrayal to my conscience'

Castro temporarily relinquished power to his 76-year-old brother after announcing he had undergone intestinal surgery. Raul had long been his brother's designated successor.

"My wishes have always been to discharge my duties to my last breath. That's what I can offer," Castro wrote. "It would be a betrayal to my conscience to accept a responsibility requiring more mobility and dedication than I am physically able to offer. This I say devoid of all drama."

Castro has not been seen in public lately, appearing only sporadically in official photographs and videotapes.

Raul Castro has hinted over the past 18 months that he wants to loosen the government's control on economic and social issues, CBC's Connie Watson reported Tuesday. Raul has also acknowledged that government wages that average about $19 a month do not satisfy basic needs.

"They say the revolution will continue, but they have to ease up on some of the things that are making people frustrated," Watson said.

Ken Frankel of the Canadian Council for the Americas said Raul Castro is an admirer of what China and Vietnam have achieved by opening their economies.

"But he's been constrained … because of his brother, who didn't want to do that," Frankel told CBC News.

Despite stepping down as president, Castro remains a member of parliament. He will also retain the post as first secretary of Cuba's Communist Party.

Bernier, Bush hope for transition

Canadian Foreign Affairs Minister Maxime Bernier said he's hoping a new leader in Cuba will bring about change.

"It is our hope that this decision will open the way for the Cuban people to pursue a process of political and economic reform," he said in a statement.

U.S. President George W. Bush expressed hope Tuesday that the end of Fidel Castro's presidency will launch a transition to democracy.

"What does this mean for the people in Cuba?" Bush asked rhetorically at a news conference in Rwanda during his trip to Africa. "They're the ones who suffered under Fidel Castro. They're the ones who were put in prison because of their beliefs. They're the ones who have been denied their right to live in a free society.

"So I view this as a period of transition and it should be the beginning of the democratic transition in Cuba."

In light of Castro's announcement, more than 100 members of Congress on both sides of the house endorsed a letter to U.S. Secretary of State Condoleezza Rice calling for a review of the longstanding trade and travel bans to Cuba.

"I think it is up to us to act," said Massachusetts congressman Jim McGovern, who is leading the call.

"If we act in a smart and intelligent and sensible way about tearing down some of these barriers, encouraging more people-to-people exchanges, lifting the travel restrictions, I think things will change."

But the Bush administration is adamant nothing will change unless Cuba does.

"Fundamentally, these are going to have to be decisions made by the Cuban people for themselves," said Sean McCormack, spokesman for the U.S. State Department.

Three contenders for the U.S. presidency — Barack Obama, Hillary Clinton and John McCain — are insisting that Cuba release its political prisoners and make sweeping reforms before relations with Washington are normalized.

10 U.S. presidents in his era

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Castro poses with two unidentified women who joined the rebel forces as nurses in this Feb. 6, 1958, file photo. ((Associated Press))

In 1959, Castro led a band of guerillas and toppled the Batista government. Although the United States was the first to recognize Castro, relations quickly deteriorated as the new leader reshaped the country into a Communist state.

Castro's government nationalized many American-owned businesses, and within a year, Cuba and the Soviet Union began developing close ties. The U.S. would later impose a trade embargo on the island in an attempt to put pressure on Castro's regime.

Castro was leader through 10 administrations and the target of CIA assassination plots, most notably the failed CIA-backed Bay of Pigs invasion of 1961.

Cuba became the focal point of a possible war between the U.S and the Soviet Union after it was discovered that nuclear missile bases were being established on the island. The weapons were eventually pulled out.

On Jan. 26, 1976, then-Prime Minister Pierre Trudeau became the first Canadian leader to pay an official visit to Cuba. Trudeau and Castro developed a close personal relationship and remained friends for years.

Castro was among the world leaders at Trudeau's funeral in Montreal in 2000. But critics have condemned him as a totalitarian dictator who ran a repressive government that quashed individual rights and carried out political executions.

With files from the Canadian Press and the Associated Press