HAVANA – Cuba’s parliament named Raul Castro president on Sunday, ending nearly 50 years of rule by his brother Fidel but leaving the island’s communist system unshaken.

In a surprise move, officials bypassed younger candidates to name a 77-year-old revolutionary leader, Jose Ramon Machado, to Cuba’s No. 2 spot – apparently assuring the old guard that no significant political changes will be made soon.

The retirement of the ailing 81-year-old president caps a career in which he frustrated efforts by 10 U.S. presidents to oust him.

Raul Castro stressed that his brother remains “commander in chief” even if he is not president and proposed to consult with Fidel on all major decisions of state – a motion approved by acclamation.

Though the succession was not likely to bring a major shift in the communist government policies that have put Cuba at odds with the United States, many Cubans were hoping it would open the door to modest economic reforms that might improve their daily lives.

In his first speech as president, Raul Castro suggested that the Communist Party as a whole would take over the role long held by Fidel, who formally remains the party’s leader. The new president said the nation’s sole legal party “is the directing and superior force of society and the state.”

“This conviction has particular importance when because the founding and forging generation of the revolution is disappearing,” Raul Castro added.

The U.S. has said the change from one Castro to another would not be significant, calling it a “transfer of authority and power from dictator to dictator light.”

Secretary of State Condoleezza Rice said Sunday Cubans have a right “to choose their leaders in democratic elections” and urged the government “to begin a process of peaceful, democratic change by releasing all political prisoners, respecting human rights, and creating a clear pathway towards free and fair elections.”

Her statement, issued shortly before parliament met, called the developments a “significant moment in Cuba’s history.”

Cuba’s parliament chose a new 31-member ruling body known as the Council of State to lead the country. The council’s president serves as the head of state and government.

The vote ended Castro’s 49 years as head of the communist state in America’s backyard. He retains his post as a lawmaker and as head of the Communist Party. But his power in government has eroded since July 31, 2006, when he announced he had undergone emergency intestinal surgery and was provisionally ceding his powers to Raul.

The younger Castro has headed Cuba’s caretaker government in the 19 months since then, and Fidel Castro has not appeared in public.

In his final essay as president, Castro wrote that preparations for the parliament meeting “left me exhausted,” and he said he did not regret his decision to step down.

“I slept better than ever,” he wrote in the commentary published on Friday. “My conscience was clear and I promised myself a vacation.”

In Old Havana, Maria Martinez, a 67-year-old retiree, watched the announcement on a Chinese-made television in her dark living room.

“He’s a trustworthy man,” she said. “He won’t make mistakes.”

“All we really want is peace and tranquility,” she added.

Her 33-year-old neighbor, Raul Rodriguez, let out a long sigh and nodded as the announcement of Raul Castro’s election was made. “He’s hard, he’s tough,” said Rodriguez, who wore an NYPD baseball cap sent by a relative in the U.S.

But a 51-year-old man hefting a wide metal tray of homemade guava and coconut pies through the streets near Havana’s train station said “this country, it’s like jail.”

“They close the doors and say ‘The president is Peter or the president is Paul’ and everyone responds ‘Good, it’s Peter or Paul.’ There’s no openness,” said the man named Isidro, who like many Cubans declined to give his last name to a foreign journalist when criticizing the government.

Machado, the new No. 2, fought alongside the Castro brothers in the Sierra Maestra during the late 1950s and is a key Communist Party ideologue.

Cuba’s young guard apparently will have to wait a little longer. Cabinet secretary Carlos Lage, 56, who is associated with the modest economic reforms of the 1990s, had been among the most visible Cuban officials since Fidel Castro fell ill and was considered a strong candidate to replace Raul as first vice president.

Associated Press writers Will Weissert in Havana and Anne-Marie Garcia in Santiago, Cuba, contributed to this report