(BBC) - Cuba and the US have formally restored diplomatic relations after an agreement struck last year putting aside decades of hostility came into force.

Just after midnight local time, the diplomatic missions of each country became full embassies.

US Secretary of State John Kerry is due to hold talks with his Cuban counterpart Bruno Rodriguez later in the day in Washington.

Despite the historic shift, both sides admit to lingering difficulties.

There were still "issues that we don't see eye to eye on", a US state department spokesman said.

Restrictions on Americans wanting to travel to Cuba remain in place, as does the wider US trade embargo banning most American companies from doing business in Cuba.

Cuba says the embargo - which it calls a blockade - is hugely damaging to its economy.

President Raul Castro has urged President Barack Obama to lift it, calling it the main stumbling block towards normalisations. But the US Congress would have to vote on the issue.

The two presidents announced the move towards diplomatic ties in December last year.