US President Barack Obama and Cuban President Raul Castro will share the same stage today in an encounter rich with symbolism as their countries set aside decades of mistrust and attempt to restore diplomatic relations.

The rapprochement is set to dominate the Summit of the Americas meeting, held in Panama, less than four months after they announced they would seek to lower tensions and boost trade and travel between the two Cold War enemies.

Mr Obama spoke to Mr Castro by phone on Wednesday before the US leader left Washington, a White House official said.

The two leaders have separate agendas for most of the day, but will both attend the start of the summit along with other regional leaders this evening.

The two leaders are to have a "discussion" on the second day of the Summit of the Americas on Saturday, according to a White House official.

"We certainly do anticipate that they will have the opportunity to see each other at the summit tomorrow.....We do expect (them to have) a discussion tomorrow," senior Obama advisor Ben Rhodes told reporters.

Apart from a couple of brief, informal encounters, the leaders of the United States and Cuba have not had any significant meetings since Mr Castro's older brother Fidel toppled US-backed dictator Fulgencio Batista in a 1959 revolution.

The two countries' top diplomats - US Secretary of State John Kerry and Cuban Foreign Minister Bruno Rodriguez - held talks at a Panama City hotel last night, the first meeting of its kind since 1958.

Sitting face-to-face in a room visible through a large glass window, Mr Kerry and Mr Rodriguez talked for over two hours.

A senior US State Department official described it as a "lengthy and very constructive discussion" and said they made progress.

Mr Obama appears to be close to removing Cuba from the US list of countries that it says sponsor terrorism.

Cuba's inclusion on the list has exacerbated tensions and made it harder for US companies to do business with Cuba.

The State Department has now recommended that Cuba be taken off the list, a US Senate Foreign Relations Committee aide said yesterday.

Mr Obama is expected to agree, although it is not clear whether he will announce his decision during the summit.

A US official said Mr Kerry and Mr Rodriguez used their meeting to smooth the way for Cuba's removal from the list.

Striking Cuba from the list would move the two countries closer to renewing full diplomatic relations, broken off by Washington in 1961, and would be popular in Latin America, where governments have pushed the US for years to change its policy on Cuba.

Widespread praise in the region for Mr Obama's new Cuba policy was tempered last month, however, when his administration imposed sanctions on Venezuela, Cuba's closest ally and main benefactor.

That controversy now hangs over the summit, which ends on Saturday.

Venezuelan President Nicolas Maduro says he will present Mr Obama with a petition signed by millions of people demanding that the sanctions be reversed.

He is certain to receive support from Mr Castro and other left-wing leaders in Latin America.