HAVANA - Fifty years after triumphant armed rebels descended from the eastern mountains, communist Cuba celebrated the revolution's anniversary Thursday with toned-down festivities following a trio of devastating hurricanes and under the enduring public absence of an ailing Fidel Castro.

Although Fidel Castro continued convalescing in private, the festivities were filled with nostalgia and praise of the bearded rebel leader known as the "Leader of the Revolution." His brother, President Raul Castro, predicted the revolution would survive another 50 years, "that will also be of permanent struggle."

The austere celebrations, including dances and concerts across the island, belied the start of a year infused with possibilities for increased cash and visitors, and other changes that might ease Cubans' daily hardships. Many here hope for improved relations with the United States when president-elect Barack Obama takes office Jan. 20 following declarations he would talk directly with Raul Castro and lift severe restrictions on family travel and remittances to the island.

"I hope he gets rid of the blockade," 42-year-old Ana Luisa Mas said as she bought a pork leg for her family's New Year's Eve celebration, referring to decades-old U.S. trade sanctions.

"We are very hopeful that with Obama our relatives will be able to visit us more and send us more money," she said, manoeuvring through hundreds of shoppers packed inside the enclosed Cuatro Caminos farmers market, rushing to buy black beans and rice, salad greens and other New Year's Eve dinner standbys.

"We also hope that Fidel will stay with us a little bit longer," Mas added.

Raul Castro, who succeeded his older brother in February, quoted extensively from his brother as he spoke from below the same balcony where Fidel declared victory over dictator Fulgencio Batista's government on Jan. 1, 1959.

He pointedly cited from a speech his brother made at Havana University a few years before he got sick, warning "this revolution can destroy itself" and that if it occurred, "it would be our own fault."

No foreign leaders were at the evening speech on a small, leafy plaza, with little fanfare beyond invitations to 3,000 Communist party faithful. Outside the seaside U.S. Interests Section in Havana, the popular group Los Van Van were performing.

Bolivian President Evo Morales, who originally said he would attend the celebration, saluted the Cuban revolution and Fidel Castro from La Paz, declaring "my respect, my admiration for Fidel."

Venezuelan President Hugo Chavez, who also initially had been expected to attend, announced in Caracas that in honour of the 50th anniversary, the Cuban flag would have a permanent place outside the Venezuelan tomb of South American independence leader Simon Bolivar.

"Cuba is part of this nation, of this union," Chavez said.

The Santiago plaza was lined with folding metal chairs for the invited guests and a huge red banner hung from a nearby colonial hotel featuring a photograph of a 32-year-old Fidel Castro as a guerrilla leader in uniform and backpack. Red, white and blue Cuban flags hung from the sides of some of the dilapidated houses along the narrow streets leading to the plaza.

The event opened with the Cuban national anthem and a short documentary featuring historic and more recent video clips of Fidel Castro, mostly from the decade before he fell ill. Images included massive marches outside the American mission demanding the return of Cuban castaway Elian Gonzalez to his father in Cuba and his eventual repatriation in June 2000.

Fidel Castro's health is a state secret and he remains out of sight after undergoing major intestinal surgery almost 2 1/2 years ago. But the 82-year-old continues to write essays that suggest he still has some say in government affairs.

Shortly before midnight Wednesday, a brief statement by Castro was read on state television, congratulating "our heroic people" on the eve of the anniversary.

The 77-year-old Raul Castro appears to be in firm control of the government, but has yet to introduce any major reforms and few expect transcendent change while his brother is alive.

Officials initially planned a more grandiose celebration but scaled back after three hurricanes this year caused $10 billion in damage. Raul Castro last week called for more cost-cutting measures as the island posted an annual economic growth of 4.3 per cent for the year, barely half the original forecast.

Over a half-century, the triumphant rebels erased illiteracy, crafted a universal health care system, and built thousands of new schools. But after Fidel Castro embraced communism in 1961, labour unions lost the right to strike, the Catholic Church was harassed and opponents of the new government were jailed.

The Havana-based non-governmental Cuban Commission for Human Rights and Reconciliation last counted 219 political prisoners on the island, down from as many as 15,000 in 1964.

Cuba's revolution was nevertheless long admired throughout the Third World as Castro stood up to the "Yankee imperialists," and infant mortality rates rivalled those of developing countries.

Cuba's communist system has hung on, even after the Iron Curtain collapsed and communist China and Vietnam embraced free markets while still maintaining their political systems.

When President George W. Bush leaves office later this month, the revolution will have outlasted 10 American presidents who maintained strict U.S. sanctions aimed at overthrowing the Cuban leadership.

Outgoing Commerce Secretary Carlos Gutierrez, a Cuban-American who used his Bush administration post to promote hard line policies against the Castro government, this week argued against any easing of sanctions.

"To suggest unconditional dialogue with the Castro brothers would only signal that the conditions in Cuba are acceptable," Gutierrez wrote in The Washington Times.

But many others think rapprochement could help force an opening.

"Confrontation plays up Havana's strong suit," Marifeli Perez-Stable of the Inter-American Dialogue, a Washington think-tank, wrote in December. "Engagement may show how weak (Cuba's) hand really is. Which one is the real hard line?"