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Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis.

Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.

One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.

As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.

Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.

China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.

Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.

The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year. China will also have a role in these talks, having become a member of the bank this year.

In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels

Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty. “The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.

“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”

Speaking to leaders gathered in Port of Spain, Mr Obama declared: "The US seeks a new beginning with Cuba."

"I know there is a longer journey that must be travelled to overcome decades of mistrust, but there are critical steps we can take toward a new day," he said.

Cuba is excluded from the summit, which includes 34 members of the Organisation of American States (OAS), though Latin American leaders have been calling for the communist country to be readmitted.

speaking on Friday in the Dominican Republic, Mrs Clinton acknowledged that US policy towards Cuba had "failed" and said Washington was "taking a very serious look at how to respond."

Addressing the summit, Mr Obama said he wanted to move forward with a sense of "equal partnership" with all the nations of the Americas despite decades of mistrust.

Mr Obama earlier greeted and shook hands with Venezuela's President, Hugo Chavez, during an impromptu meeting. Photographs released by the Venezuelan government showed Mr Chavez - one of the Bush's administrations most strident critics - smiling and clasping hands with Mr Obama at the start of the summit.

Before the summit began Mr Chavez appeared to chastise the US for its approach to Cuba, which is not a member of the OAS. In a pre-summit statement, he also said that "there is more democracy in Cuba than in the United States". But he greeted the US president warmly when the opportunity arrived, gripping the Mr Obama's hand in welcome. "I greeted Bush with this hand eight years ago; I want to be your friend," Mr Chavez told Mr Obama, according to a Venezuelan presidential press office statement.

The US secretary of state, Hillary Clinton, said Havana should not be readmitted until it made concessions on democracy and human rights, a line echoed by the advocacy group Human Rights Watch which said political prisoners and repression continued under President Raul Castro.

Those arguments were swept away by largely leftist governments who thought the organisation had been beholden to Washington for too long. "The vote to readmit Cuba to the OAS represents an unprecedented assertion of Latin American power in a hemispheric institution long dominated by the US," said Daniel Erikson, an analyst at the Inter-American Dialogue thinktank and author of The Cuba Wars.

“The specter of Iran raises red flags in a way that China doesn’t, because China tends to respect the American sphere of influence,” said Julia E. Sweig, a Latin American expert at the Council on Foreign Relations.

Iran’s motives are murkier, according to administration officials. It has cultivated wide-ranging economic ties with Venezuela and, to a lesser extent, Nicaragua. But it has also been linked to the bombing of a Jewish community center in Buenos Aires in 1994, which killed 85 people.

Iran is not known to have a big presence in El Salvador, officials said, and it was not represented at Mr. Funes’s inauguration. But the change in power after 17 years of a pro-American right-wing government could offer an opening.

Boosting bilateral trade between Russia and Latin America, which could reach $15bn (£9.9bn) this year, is another priority for the Russian president during his talks.

In Spain, where the growth has been the most explosive, the foreign population rose to 5.2 million last year out of a total of 45 million people from 750,000 in 1999, according to the National Statistics Institute. Ireland’s population, now 4.1 million, was also transformed, with the percentage of foreign-born residents rising to 11 percent in 2006 from 7 percent in 2002.

Alcalá, a Madrid bedroom community and the birthplace of Miguel de Cervantes, is home to so many Romanian immigrants — 20,000 by some estimates — that Romania’s president, Traian Basescu, campaigned here for parliamentary elections last fall.

But signs of the reverse migration of Romanians are already evident. “Slowly, slowly, they’re disappearing,” said Gheorghe Gainar, the president of a Romanian cultural association in Alcalá. “When you look for them, you don’t find them. Sometimes you ask a relative, and they say they’ve gone back.”

The reverse exodus from more prosperous countries in Western Europe is likely to add to the economic pressures already buffeting Central and Eastern Europe, where migrants from developing countries are in turn being encouraged to leave. The Czech government announced in February that it would pay 500 euros, or about $660, and provide one-way plane tickets to each foreigner who has lost his job and wants to go home. And in Bucharest, Romania’s capital, workers from China have been camped out in freezing weather in front of the Chinese Embassy for two months, essentially stranded after their construction jobs disappeared.

Like the Czech Republic, Spain is offering financial incentives to leave. A new program aimed at legal immigrants from South America allows them to take their unemployment payments in a lump sum if they agree to leave and not return for at least three years. The Spanish government says only around 3,000 people have taken advantage of the plan, but many others are leaving of their own accord.

Airlines in Spain are offering deals on one-way tickets to Latin America, and they say demand has increased significantly. Every day, Barajas airport in Madrid is the setting for emotional departures, as families send their jobless loved ones back home.

Senator John Ensign, Republican of Nevada, said on CNN that it was “irresponsible for the president” to be seen laughing and joking with “one of the most anti-American leaders in the entire world,” referring to Mr. Chávez.And Senator Lindsey Graham, Republican of South Carolina, pointed to Cuba’s estimated 200 political prisoners. “Release the prisoners and we’ll talk to you,” he said of the Cuban government on Fox News Sunday, adding, “Put up or shut up.”

Mr. Obama defended his overtures at a news conference on Sunday, saying the handshakes and the polite conversation he shared with Mr. Chávez here were hardly “endangering the strategic interests of the United States.”Wrapping up a four-day swing through Latin America, he said he believed he had paved the way for “frank dialogue” with countries like Venezuela and Cuba, whose relations with the United States have been badly strained.But he also sought to calibrate his message, saying Sunday that he had “great differences” with Mr. Chávez and insisting that freedom for the Cuban people would remain the guiding principle of his foreign policy.

The antagonism seemed to melt away, replaced by a palpable enthusiasm for a new openness from the United States and hopes of improved relations for Washington with Venezuela and Cuba, which emerged as a core issue here.

And President Daniel Ortega of Nicaragua, an old Washington nemesis, sought to embarrass Mr. Obama in a nearly one-hour speech filled with anti-American vitriol in which he likened the American embargo of Cuba to the Berlin Wall.

Hoping to push the process forward, leaders from Latin America and the Caribbean have volunteered to aid in a reconciliation between the United States and Cuba. “Brazil would be able to help,” Mr. da Silva said Sunday. In an interview published Sunday in the Spanish newspaper ABC, he said the United States should not wait for Cuba to take the next step in efforts to end their half-century of feuding.

Mr. Chávez took the initiative Saturday, saying he was naming Roy Chaderton, Venezuela’s representative to the Organization of American States, to be his new ambassador to Washington.

Mr. Chávez had ejected the American ambassador to Venezuela in September, saying he had discovered an American-backed plot to remove him from power. Washington responded in kind.

But the Russian deputy foreign minister, Sergei Riabkov, said suggestions in the media that the naval exercises signal a return to Cold War politics in Latin America were misguided. "There is no geo-political connotation whatsoever," he told the BBC.

Between 2005 and 2007, Venezuela spent around $4bn (£2.6bn) on military equipment - most of it from Russia.

Ties between the two superpowers have become strained because of Washington's plan for a missile defence system in Poland and the Czech Republic - something Moscow is firmly opposed to. Indeed President Medvedev, has said he will deploy missiles in the Russian exclave of Kaliningrad, between Poland and Lithuania, if the US initiative goes ahead in its present form.

Mr Chavez recently took a delegation of Russian top brass to inaugurate a gas platform in the Gulf of Venezuela, co-owned by their respective state-run energy companies - PDVSA and Gazprom.

During the trip, the Russian government also signed joint agreements on issues as diverse as gold and bauxite mining, ceramics and fishing. It is a combination Russian technology and know-how coupled with Venezuela's resources and manpower.

Officials said most of those killed so far in Mexico were young adults - rather than more vulnerable children and the elderly. It is unclear how effective currently available flu vaccines would be at offering protection against the new strain, as it is genetically distinct from other flu strains.

Only a handful of the Mexican cases have so far been laboratory-confirmed as swine flu, while in the US confirmed cases had only mild symptoms. Health experts want to know why some people become so seriously ill, while others just get a bit of a cold, the BBC's Imogen Foulkes reports from Switzerland.

Speaking in Geneva, an expert from the World Health Organization (WHO), the UN's health agency, expert said the swine flu virus could be capable of mutating into a more dangerous strain but that more information was needed before raising the WHO's pandemic alert phase.

H1N1 is the same strain that causes seasonal flu outbreaks in humans but the newly detected version contains genetic material from versions of flu which usually affect pigs and birds.

It is spread mainly through coughs and sneezes.

Ten New Zealand students from a group which visited Mexico have tested positive for Influenza A, making it "likely" they are infected with swine flu In France, a top health official told Le Parisien newspaper there were unconfirmed suspicions that two individuals who had just returned from Mexico might be carrying the virus Spain's health ministry says three people who returned from a trip from Mexico with flu symptoms are in isolation and being tested In Israel, medics are testing a 26-year-old man who has been taken to hospital with flu-like symptoms after returning from a trip to Mexico Two people in Queensland, Australia, are being tested in hospital after developing flu-like symptoms on returning from Mexico

Officials in Mexico confirmed that 20 people had died from the virus while another 61 deaths were suspected cases of swine flu. More than 1,300 people have been admitted to hospital with suspected symptoms since 13 April. With Mexico City apparently the centre of infection, many people are choosing to leave the city, the BBC's Stephen Gibbs reports.

Dr Fukuda said on Sunday there was no proof that eating pork would lead to infection. "Right now we have no evidence to suggest that people are getting exposed, or getting infected, from exposure to pork or to pigs, and so right now we have zero evidence to suspect that exposure to meat leads to infections," he said.

Mrs Clinton made her comments about Cuba in the Dominican Republic, ahead of the Summit of the Americas that begins in Trinidad and Tobago later on Friday. "We are continuing to look for productive ways forward because we view the present policy as having failed," she said at a press conference.

Cuba is excluded from the summit, which includes 34 members of the Organisation of American States (OAS), though Latin American leaders have been calling for the communist country to be readmitted. OAS Secretary-General Jose Miguel Insulza said on Friday he would ask the organisation's members to readmit Cuba, 47 years after it was suspended.

Venezuelan President Hugo Chavez said he would veto the final declaration from the OAS summit because of Cuba's exclusion.

The left-wing leader was ousted early on Sunday in a joint move by the army, judiciary, congress and disaffected members of his own party

The Obama administration said Zelaya's overthrow was illegal and had "evolved into a coup" but stopped short of defining it as a coup, a move which would require cutting US aid. Latin American governments went further in their condemnation and said they would withdraw their envoys. Several neighbouring states said they would cut trade for 48 hours.

Zelaya, a wealthy rancher, was popular with some of Honduras's poor but had low approval ratings and sour relations with the courts, congress and military. His plan for a referendum which might have abolished term limits triggered the crisis.

On Tuesday, Mrs. Clinton plans to attend a meeting in Honduras of the Organization of American States. Members of the group want to make an even clearer break with the past by moving to readmit Cuba, which the organization expelled in 1962, citing its alliance with the Communist bloc. Mrs. Clinton has fended off calls for Cuba to be offered membership until Havana moves to accept the group’s democratic principles. On Sunday, she reiterated that the United States would oppose the efforts of several Latin American countries to immediately reinstate Cuba.“We believe that membership in the O.A.S. comes with responsibility, and that we must all hold each other accountable,” she said. Cuba, for its part, has said it has no interest in returning to an organization that the official newspaper Granma referred to recently as “that decrepit old house of Washington.”