By Jeff Franks
SANTIAGO DE CUBA, Cuba (Reuters) - Cuba celebrated on Thursday the 50th anniversary of a 1959 revolution whose leader Fidel Castro transformed the island into a communist state that has survived despite decades of opposition from the 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 in poor health, 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.
Celebrations have been subdued as Cuba is mired in economic problems and divided on what the revolution has achieved.
Raul Castro, who officially replaced his older brother as president in February, was to speak on Thursday evening in the eastern city of Santiago de Cuba from the same balcony where Fidel Castro proclaimed victory after U.S.-backed dictator Fulgencio Batista fled on January 1, 1959.
Fidel Castro has not been seen in public since undergoing intestinal surgery in mid-2006 and was not expected to attend. But in a brief message on the front page of Communist Party newspaper Granma on Thursday, he sent his congratulations to "our heroic people" for 50 years of revolution.
Raul Castro said his speech would include a 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 in a television interview.
Cuba was buffeted in 2008 by three hurricanes that caused $10 billion in damages and by the global financial crisis.
As it has for decades, the government also blames its woes on the United States' 46-year-old trade embargo against Cuba, which it says has cost the island $92 billion over time.
Although widely condemned by governments around the world, 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, greater freedoms, and much more than the $20 they earn on average each month.
They suffered for years after the 1991 collapse of the Soviet Union, Cuba's biggest benefactor, threw the economy into a tailspin from which it has only recently begun to recover, with help from oil-rich ally Venezuela.
Venezuelan President Hugo Chavez, who calls Fidel Castro a father and now leads a bloc of socialist leaders in Latin America, honoured the Cuban revolution on Thursday.
"Cuba is part of this nation... For Cuba we cry, for Cuba we fight, for Cuba we are ready to die fighting," Chavez said, dressed in a dark suit, red tie and presidential sash at a ceremony in Venezuela's national pantheon.
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 violence and graft.
But as Castro's new government moved towards communism, many in the upper- and middle-classes fled to the United States in a diaspora that 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 a 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 and Enrique Andres Pretel in Caracas; Editing by Kieran Murray)