Hours after he was inaugurated Tabare Vazquez, 65, restored links with communist Cuba that were cut three years ago by his centre-left predecessor Jorge Batlle.

The new president also signed an ambitious US$100m program to battle poverty in Uruguay, a once prosperous economy that suffered major setbacks in recent years.

His swearing-in marked the expansion of the group of leftist Latin American leaders, many of whom were present at the ceremony, included the presidents of Argentina, Bolivia, Brazil, Chile, Paraguay and Venezuela.

But Cuba’s President Fidel Castro, cancelled his planned visit at the last minute, citing health reasons.

Castro sent his Foreign Minister Felipe Perez Roque, who alongside his Uruguayan counterpart Reinaldo Gargano signed the agreement to restore relations.

Mr Vazquez expressed satisfaction the two countries had mended their differences, saying ties “should never have been broken off.”

The new government was also scheduled to sign oil trade agreements with Venezuela, whose President Hugo Chavez has infuriated Washington with his fierce leftist rhetoric.

Sworn in by Senate President Jose Mujica — a former leftist insurgent – Mr Vazquez pledged to respect the constitution and to “work tirelessly for the prosperity of the Uruguayan people.”

An oncologist and a former mayor of Montevideo, Mr Vazquez led the leftist Broad Front coalition to an overwhelming electoral victory four months ago, ending the two-party domination of Uruguay, a long-time US ally.

He has vowed to pursue moderate policies and to seek stronger ties with other Latin American countries.

In his speech to congress, he also undertook to find out the truth about the so-called “disappearances” of opponents of the 1973-1985 military dictatorship.

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