Historic handshake: Obama and Raul Castro meet during Panama summit
Handout picture released by the Peruvian Presidency showing Cuban President Raul Castro (R) and US President Barack Obama greeting each other before the opening ceremony of the VII Americas Summit, in Panama City on April 10, 2015. [AFP]

US President Barack Obama and Cuba's Raul Castro greeted each other and shook hands at the Summit of the Americas, marking a new milestone in their diplomatic thaw.

A White House official characterized the meeting as an "informal interaction," adding that "there was not a substantive conversation between the two leaders."

Earlier Obama and Castro, separated by the presidents of Ecuador and El Salvador, stood in the second of three rows at a Panama City convention center as the country's national anthem was sung at the opening ceremony for the summit.

The sight of Obama and Castro in the same room instantly became a potent symbol of their bid to renew diplomatic ties that were severed in 1961. It was the first time that a Cuban leader attended the summit in its 21-year history.

Both smiling broadly, Obama and Castro had arrived separately for the two-day summit's inauguration.