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By Matt Spetalnick KINGSTON (Reuters) - President Barack Obama on Thursday unveiled a major clean energy partnership at a Caribbean summit where he sought to reassert U.S. leadership in the region at a time when the economic clout of oil-producing Venezuela appears to be receding. The White House used the occasion to announce an important step towards healing its five-decade-old rift with Cuba, saying the State Department has completed a review of whether to remove the communist-ruled island from a list of state sponsors of terrorism. The review is being studied by the White House, and a green light for Havana's removal would open the door to the restoration of diplomatic relations between the United States and Cuba after 54 years. Obama headed to Panama later Thursday to attend a Western Hemisphere summit, where he will cross paths with Cuban President Raul Castro for the first time since the two announced a historic opening between their countries in December. In Kingston, Caribbean leaders were supportive of U.S. détente with the region's most populous island nation. Jamaican Prime Minister Portia Simpson Miller praised Obama for his Cuba outreach, saying: "You are on the right side of history." As the first U.S. president to visit Kingston since Ronald Reagan in 1982, Obama faces the challenge of convincing Caribbean leaders that Washington is genuinely re-engaging after a long period of perceived neglect. Obama received a warm reception as crowds assembled along his motorcade route on Thursday morning to watch and snap photos. He paid homage to legendary reggae singer Bob Marley immediately after landing on Wednesday night, making an unannounced stop at the house in Kingston where the dreadlocked musician lived until his death in 1981. A big fan since high school, Obama said the quick tour of the house was "one of the more fun meetings that I've had since I've been President." He later attended a meeting of the 15-member Caribbean Community, or Caricom, to discuss energy, security and trade. Bahamian Prime Minister Perry Christie, Caricom’s current chairman, complained about illegal gunrunning from the United States to crime gangs in the Caribbean and said more had to be done to stop it. Obama's meetings focused on improving energy security and efficiency, as well as fighting climate change, the White House said, announcing $20 million in financing to encourage investment in clean energy projects. The United States will also partner with Caribbean and Central American countries on energy sector reform, regional integration and clean energy projects. "One of the greatest barriers to development in the Caribbean ... is expensive, often unreliable and carbon-intensive energy," Obama said. "Caribbean countries are particularly vulnerable to the effects of climate change, and we have to act now." Some analysts say a key reason why Washington is suddenly paying attention to the Caribbean is a desire to reduce the islands' dependence on cut-rate Venezuelan oil that Caracas has used to wield regional influence. Many Caricom members participate in Venezuela's discounted Petrocaribe oil program, but Caracas now finds itself in growing economic distress due to low oil prices. "The dependence in the last decade on subsidized oil imports that are starting to go away will have pretty big macro-economic effects," said Daniel Restrepo, Obama's former top adviser for Latin America. Jamaica's energy minister, Phillip Paulwell, was quoted in local media as saying any deals with the United States would not mean Jamaica was distancing itself from Venezuela. Venezuelan President Nicolas Maduro has made clear he will confront Obama this week at the Summit of the Americas over new U.S. sanctions against Venezuelan officials. While Maduro may try to upstage the rapprochement between Washington and Havana that threatens to undermine his longstanding alliance with Castro, he is likely to get push-back from regional leaders who welcome better U.S.-Cuba relations. "The thaw between Washington and Cuba trumps all other issues," said Michael Shifter, president of the Inter-American Dialogue think tank in Washington. "However close Havana’s ties with Venezuela are, I don’t think the Cubans want to do anything to upset Obama’s new Cuba policy." In Jamaica Obama also launched the Young Leaders of the Americas Initiative (YLAI) to expand opportunities for emerging entrepreneurs and civil society activists, with participants from Latin America and the Caribbean, including Cuba. (Additonal reporting by Aileen Torres-Bennett in Kingston Writing by David Adams. Editing by Andrew Hay, Christian Plumb and Ken Wills)