HAVANA -- Cuba marked a historic milestone in its communist revolution Sunday as Raul Castro took over as president from his brother Fidel, who ruled the island with an iron fist for almost 50 years.

"Fidel is irreplaceable; the people will continue his work when he is no longer with us physically, though his ideas always will be here," Raul Castro, 76, told lawmakers in his acceptance speech.

"I accept the responsibility I have been given with the conviction I have repeated often: there is only one Commander in Chief of the Cuban Revolution, Fidel is Fidel and we all know it well."

Ailing Fidel Castro, 81, who announced on Tuesday he was stepping aside after ruling for almost 50 years, was not present as the National Assembly held its landmark session to select a new leader.

But the last of the Cold War leaders voted for his successor in a sealed envelope and newly reelected speaker Ricardo Alarcon announced later to the assembly that Raul -- the only candidate to be put forward -- had been named the new president.

Raul Castro asked lawmakers for permission to consult with his legendary bearded older brother, on "matters of great importance," and lawmakers gave him a swift green light.

In defiance of US-led calls for democratic change, Fidel Castro had ruled out any betrayal of the Cuban revolution ahead of Sunday's landmark vote.

"The end of one era is not the same thing as the beginning of an unsustainable system," Castro wrote in an editorial on Friday.

The only place in need of transformation was the United States, he said, arguing that "Cuba had changed some time ago, and will continue on its dialectical path."

In his Tuesday announcement, the frail communist icon had quashed speculation that he would retake the country's helm he ceded "temporarily" to defense chief Raul Castro on July 31, 2006, shortly after undergoing surgery.

The 614-member assembly was also choosing the country's Supreme Commander of the Armed Forces, first vice president, five other vice presidents, a party secretary and the 23 members of the Council of State.

Jose Ramon Machado, another "old guard" Cuban leader, was selected for the number-two spot, lawmakers said. Machado is 77, a former health minister and a founder of the Communist Party.

He has been chief of party organization since 1990.

Vice President Carlos Lage, 56, seen by many as a rising younger-generation leader with a longshot chance at the presidency, kept his current place.

With Machado behind him "Raul Castro is signaling that the old guard is still on top," Dan Erikson, an analyst with the Inter-American Dialogue, said in Washington.

"Machado Ventura is a longtime insider and party crony (so) Cuba still is not in the process of a major generational transition," Erikson added.

Machado has no international profile to speak of, Erikson noted, so he would not overshadow Raul Castro.

After years in Fidel's charismatic shadow as Cuba's number two and defense minister, Raul faces massive challenges: dismantling a monolithic leadership, preparing the transition to a newer generation in power, reforming the economy and resolving domestic problems.

With half of Cuba's farmland idle; monthly salaries averaging the equivalent of 15 dollars, woefully inadequate even in a subsidized economy; national transport near collapse; shortfalls in housing and food stocks, and a shoddy bureaucracy, the outlook is not good.

With his team, Raul Castro is "recognizing that domestic affairs will be the bread and butter of his not very long rule," Erikson said.

Former US Central Intelligence Agency analyst Brian Latell believes Raul is a "transition figure" who "like his brother, has no intention of opening up Cuba" in the political sense.

US Secretary of State Condoleezza Rice nonetheless urged Cuba to move toward "peaceful, democratic change."

"We urge the Cuban 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," Rice said in a statement in Washington.

Most analysts predict Cuba's upcoming changes will be largely economic. In the 19 months since he took over as temporary leader, Raul Castro has made some timid adjustments in the economy but has promised bigger changes and has criticized the country's "excessive prohibitions."

However, he has made it clear that everything will take place "within socialism," and that the solutions to the country's problems will come "little by little."