By Jeff Franks
HAVANA (Reuters) - Cuba on Thursday celebrated the 50th anniversary of a 1959 revolution whose leader Fidel Castro transformed the island into a communist state that has survived despite long years of opposition from the nearby United States and the collapse of its Cold War benefactors.
The revolution's landmark anniversary comes at a time when the era of Fidel Castro, now 82 and ailing, is winding down and uncertainty hangs over the future of the Cuba he built into an improbable world player admired for its social gains but criticized for its human rights record.
A celebration that had been expected to be a major event has been subdued in a nation mired in economic problems and divided on what the revolution has wrought.
President Raul Castro, who officially replaced ailing older brother Fidel Castro in February, was to speak on Thursday evening in the eastern city of Santiago de Cuba from the same balcony which the elder Castro proclaimed victory after U.S.-backed dictator Fulgencio Batista fled on January 1, 1959.
Fidel Castro, who has not been seen in public since undergoing surgery for an undisclosed intestinal ailment 2-1/2 years ago, was not expected to attend, officials said.
In a brief message on the front page of Communist Party newspaper Granma on Thursday, Castro sent his congratulations to "our heroic people" for 50 years of revolution.
In a television interview on Wednesday night, Raul Castro said his speech would include the sombre message that, 50 years on, many difficulties and much work lie ahead.
"There are many positive things, but at the same there are new problems that we have to confront. We haven't had peace, we haven't had tranquillity," he said.
Last week in a speech to the National Assembly, Castro painted a gloomy picture of the Cuban economy which has been buffeted by three hurricanes that caused $10 billion (6.9 billion pound) in damages and by the global financial crisis.
As it has for decades, the government also blamed its woes on the United States' 46-year-old trade embargo against Cuba, which it says has cost the island $92 billion over time.
The embargo is the cornerstone of U.S. policy that has sought the overthrow of the Castro government almost since the revolution's birth.
While most Cubans hail their government's achievements in education and health, many are weary of excuses and yearn for a better life and greater freedoms.
They suffered for years after the 1991 collapse of the Soviet Union, Cuba's biggest benefactor, which threw the economy into a tailspin from which, with help from oil-rich ally Venezuela, it has only recently begun to recover.
They say they need more than the $20 they earn on average each month.
Cubans danced in the streets when Castro's bearded rebels toppled dictator Fulgencio Batista on January 1, 1959, but on Thursday people went about their business on streets quieter than usual as many slept in after late New Year's parties.
Cuban flags and banners extolling the revolution hung from buildings and light posts.
A 69-year-old parking attendant who preferred not to give his name fondly recalled how those same streets exploded in jubilation as news spread 50 years ago that Castro had won.
"People came running out of their houses into the streets, shouting, laughing, dancing. There was more happiness than you can imagine," he said.
They also knocked over parking meters and sacked Mafia-owned casinos that illicitly fed money to Batista officials and became hated symbols of their corruption.
"People forget how it was," said the attendant.
The overthrow of Batista, who fled Cuba along with his family and top supporters as rebel forces swept towards Havana, was broadly supported by Cubans tired of his government's violence and graft.
But as Castro's new government moved towards communism, many in the upper- and middle-classes began to flee across the Florida Straits in a diaspora that continues today and now numbers more than 1 million people.
In Miami, the centre of the Cuban exile world, the 50th anniversary was a source of pain, not cause for celebration.
"For us it is a tragic event," said Jose Basulto, the longtime head of the exile group Brothers to the Rescue. "This is now an old sore."
"There's nothing to celebrate. All the revolution has brought is destruction to Cuba," said Ninoska Perez, a Miami radio commentator and anti-Castro activist.
(Additional reporting by Tom Brown in Miami; editing by Kieran Murray)