* Caribbean leaders urge Washington to lift embargo
* Clinton offers dialogue but wants Havana to respond
* Cuba issue looks set to dominate summit (Updates with Hugo Chavez quote)
By Pascal Fletcher
PORT OF SPAIN, April 16 (Reuters) - The United States is ready to talk to Cuba, Secretary of State Hillary Clinton said on Thursday as Caribbean leaders piled pressure on Washington to end its sanctions against the island.
A day before the start of a 34-nation Summit of the Americas that excludes Cuba, the issue of the hemisphere's only one-party communist state and U.S. hostility towards it was dominating diplomatic activity in the region.
U.S. President Barack Obama, who hopes to open up a new era of improved cooperation with Latin America and the Caribbean at the three-day meeting in Trinidad and Tobago, earlier this week relaxed parts of the 47-year-old U.S. trade embargo on Cuba.
But he says he expects Havana to reciprocate by giving more human rights and democracy to its citizens, and that the embargo will remain in place until this is forthcoming.
After talks with Clinton in Haiti on Thursday, Haitian President Rene Preval said he hoped that Cuba could take part in the next summit meeting of leaders of the hemisphere.
"My wish, and it is a wish already expressed several times by the United Nations General Assembly, is that the embargo be lifted," Preval said in the Haitian capital, Port-au-Prince.
Clinton said she agreed with the emphasis on moving toward dialogue throughout the hemisphere. "We stand ready to discuss with Cuba additional steps that could be taken," she said.
But she made clear Washington was also waiting for Havana to make a contribution to an improvement of relations.
"We would like to see Cuba open up its society, release political prisoners, open up to outside opinion and media and have the kind of society that we all know would improve the opportunities for the Cuban people," Clinton said.
In the buildup to the summit, Obama has faced a growing chorus of calls from Latin American governments -- including regional heavyweight Brazil and oil producer Venezuela -- to end the U.S. policy of trying to isolate Cuba.
Critics say the policy has failed to foster change in Cuba and, on the contrary, has isolated Washington in the region.
CHAVEZ AND LEFT-WING ALLIES
Washington wants the Trinidad and Tobago summit to focus its attention on tackling the global economic crisis that threatens to reverse recent growth in Latin America and the Caribbean and to send millions back into poverty.
While U.S officials say they don't want leaders to be "distracted" by the sensitive Cuba issue, Venezuelan President Hugo Chavez had pledged to demand at the summit Cuba's return to regional groups, like the summit meetings.
The voluble Venezuelan leader, a fierce critic of Obama's conservative predecessor George W. Bush, said on Thursday he would not sign the summit draft declaration, which speaks of cooperation to fight poverty and inequality but does not mention the issue of Cuba.
"I ask the question: Where is there more democracy, in the United States or Cuba? Who has the democracy meter to measure that?" Chavez asked during a meeting in eastern Venezuela with left-wing allies, including Cuban President Raul Castro.
"I have no doubt in saying: there's more democracy in Cuba than in the United States," he added. Like Castro, he wore military uniform.
The Summit of the Americas falls on the anniversary of one of the worst U.S. foreign policy fiascos in recent history, the Bay of Pigs invasion of Cuba on April 17-19, 1961.
CIA-supported Cuban exiles were routed in a battle that consolidated communist rule 90 miles (140 km) from U.S. soil.
In an op-ed article on Thursday, Obama urged the region's leaders not to get bogged down in old debates.
"We must choose the future over the past, because we know that the future holds enormous opportunities if we work together," he wrote, calling for a partnership "on fundamental issues like economic recovery, energy and security".
But other leaders seem set on raising the Cuba issue.
"We feel very strongly that Cuba can be seen as one of the important members of the Caribbean community and that the time for the continued isolation of Cuba is really at an end," St. Kitts and Nevis Prime Minister Denzil Douglas said.
Cuba was suspended from the 35-member Organization of American States (OAS) in 1962 because the communist system created by Fidel Castro after he took power in a 1959 revolution was judged incompatible with OAS principles. (Additional reporting by Pat Markey in Port of Spain, Joseph Guyler Delva in Port-au-Prince, Fabian Cambero in Cumana, Venezuela; Editing by Kieran Murray)