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By Jeff Mason and Roberta Rampton WASHINGTON (Reuters) - President Barack Obama said on Wednesday the United States had agreed to the historic step of re-establishing diplomatic relations with Cuba and will raise its flag over a U.S. Embassy in Havana later this summer. "This is a historic step forward in our efforts to normalize relations with the Cuban government and people and begin a new chapter with our neighbors in the Americas," Obama said in a statement delivered in the White House Rose Garden. "A year ago it might have seemed impossible that the United States would be once again raising our flag, the Stars and Stripes, over an embassy in Havana." Obama said the controversial move would allow the United States to have more influence over its former enemy and he urged Congress to go a step further by lifting the U.S. embargo on the island.