By Andrew Cawthorne, Reuters

                  HAVANA - In a fast-escalating war of words between the White House's
                  new Latin America policy chief and President Fidel Castro's government,
                  Havana yesterday called Otto Reich a ''terrorist'' with a ''sick'' hatred of the Cuban
                  Revolution.

                  Cuba's comments on Assistant Secretary of State Reich were made
                  two days after he labeled the Castro government ''a failed, corrupt, dictatorial,
                  murderous regime'' in probably the strongest words to date by the Bush
                  administration on Cuba.

                  The exchange further diminishes hope of a US-Cuba rapprochement following
                  cooperation over the transfer of prisoners from Afghanistan to Guantanamo Bay
                  Naval Base and the first sale of US goods to Cuba in 40 years.

                  In a short communique on the front page of its daily Granma, Cuba's ruling
                  Communist Party announced that in the evening, state TV would air a round-table
                  discussion on ''Otto Reich: a Terrorist in the US Government.''

                  ''Right from the start of his activities in such an important position, he has begun
                  pouring out his sick and visceral hatred of the Cuban Revolution,'' the communique
                  said of Reich, a Cuban-American known for his opposition to Castro and
                  communism.

                  Reich also played a high-profile role in former President Ronald Reagan's
                  controversial fight against Nicaragua's leftist Sandinista government, an ally of
                  Castro, in the 1980s.

                  That campaign produced the biggest political scandal of the Reagan presidency
                  when administration officials were found to have cut a secret deal with Iran to trade
                  arms for money that was then funneled to the Contras in violation of US law.

                  When President Bush nominated Reich last year, Castro denounced the decision,
                  saying that the proposal of such ''a sordid personality with a fascist mentality''
                  showed that the White House has a ''clear disrespect for Latin America.''

                  In his speech Tuesday, Reich firmly opposed opening the US economy to Cuba.
                  The United States imposed the embargo on Cuba in 1961, two years after Castro's
                  revolution. ''We are not going to help Fidel Castro stay in power by opening up our
                  markets to Cuba,'' he said.

                  Granma called Reich a ''spokesman'' for the Cuban-American ''mafia'' and said his
                  appointment was ''imposed by the Bush administration, exploiting a Congressional
                  break.''

                  Bush named Reich under a recess appointment, enabling the president to bypass
                  Congress, which had blocked the nomination for months, and assuring that Reich
                  will hold the post at least this year.

                  Senior Democrats bitterly opposed his nomination and were angered by the
                  appointment. They say Bush made the appointment to appease the powerful
                  Cuban-American community in Florida, where his brother Jeb is running for
                  reelection as governor this year.

                  Supporters, however, say Reich is a skilled diplomat.