After years in Fidel's charismatic shadow as Cuba's number two and defense minister, Raul Castro faces massive challenges, including preparing the transition of power to a newer generation and reforming the economy.

"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 late Sunday.

In the 19 months since he took over as temporary leader, Raul Castro has made some minor adjustments in the economy, while promising bigger changes.

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

People in the street voiced hopes that the new president would usher in long-sought economic reforms to improve their daily lives.

"This is the best that could have happened to Cuba," Carlos Muguercia, a 78-year-old craftsman said. "Raul already knows the situation. He knows how to solve problems, in any case the most serious ones."

Others were less enthusiastic at the dynastic succession.

"Raul is Fidel without a beard," argued one young man enjoying a beer at a bar in Havana's historic center.

In a sign that change may take time, Raul Castro said he would consult with his brother on major issues. And he vowed to be on guard against Cuba's powerful northern neighbor the United States.