Obama also called for a return to allowing Cuban-Americans to visit relatives and send money to Cuba without limits, The Los Angeles Times reported.
"It's time for more than tough talk that never yields results," he said. "It's time for a new strategy. There are no better ambassadors for freedom than Cuban-Americans."
Obama spoke at the Cuban-American National Foundation's annual Cuban Independence Day banquet. He attacked Sen. John McCain, the likely Republican presidential nominee, for promising earlier this week to keep to the long-standing U.S. policy of refusing to deal with Fidel Castro or, more recently, his brother, Raul.
"Instead of offering a strategy for change, he chose to distort my position, embrace George Bush's, and continue a policy that's done nothing to advance freedom for the Cuban people," Obama said.
The audience of about 500 cheered when Obama promised to reverse the Bush policy of restricting visits and remittances. Only a few people clapped, however, when he talked of dialogue with President Raul Castro.