Myanmar's decision to pardon dissidents, journalists and a former premier injected new momentum into a surprising flurry of reform in the long-isolated state and into US-led efforts to offer incentives to solidify the process.
Obama said "flickers of reform" were burning brighter because of the prisoner release, which included some of the leaders of a foiled 1988 democracy uprising, though he added that more needed to be done.
"President Thein Sein's decision to release hundreds of prisoners of conscience is a substantial step forward for democratic reform," Obama said in a written statement.
He said the move was a "crucial step" in Myanmar's democratic transformation and national reconciliation process, and also welcomed a recent ceasefire agreement between the government and ethnic Karen rebels.
The Obama administration has closely coordinated its policy towards the easing of repression in Myanmar with democracy icon Aung San Suu Kyi and allies, and said Myanmar must show it is serious about reform before US and international sanctions are lifted.
Secretary of State Hillary Clinton, who made a landmark visit to Myanmar last year to prod the reforms, said she would begin the "lengthy" process of upgrading US representation in Myanmar from charge d'affaires level.
"We will identify a candidate to serve as US ambassador to represent the United States government and our broader efforts to strengthen and deepen our ties with both the people and the government," she said.
Clinton said she would telephone Thein Sein and Aung San Suu Kyi at the weekend to show American commitment for the reform process.
"This is a momentous day for the diverse people of Burma," she said, using Myanmar's former name.
"We will continue to support them and their efforts and to encourage the government to take bold steps that build the kind of free and prosperous nation that I heard from everyone I met with they desire to see."
Republican Senator Mitch McConnell, who will visit Myanmar next week and has been a key player in framing punishing US sanctions against the former junta, backed the administration's move.
"While the Thein Sein government will need to do more to explain the military relationship with North Korea and hold free and fair elections, it appears entirely appropriate that the United States would consider restoration of more formal diplomatic ties," McConnell said.
US officials said Assistant Secretary of State for International Security and Nonproliferation Thomas Countryman would also visit Myanmar next week to follow up US calls for an end to suspected imports of North Korean weapons, especially missiles.
A senior US State Department official told reporters on the condition of anonymity that the United States believed that North Korea sold Myanmar small arms, combat equipment and missiles.
"We have asked the current government for a commitment not to enter into new contracts of this sort with Pyongyang," he said, noting they violated UN Security Council resolutions on North Korea.
The prisoner release was also welcomed by Myanmar exiles and rights groups.
T. Kumar, Amnesty International's US director of international advocacy, said the prisoner release was a "major step forward" but called on Clinton to insist on the immediate release of all prisoners of conscience.
The US Campaign for Burma also called for all political prisoners to be freed without delay but praised the "courage" of Thein Sein.
Myanmar's government, which in March last year replaced a long-ruling military junta, has surprised US officials with its reform drive.
It froze work on an unpopular dam supported by China last year, and on Thursday signed a ceasefire with a major armed ethnic Karen group involved in one of the world's longest-running civil conflicts.
Myanmar announced plans to hold by-elections on April 1, and Aung San Suu Kyi -- who was released from years of house arrest in November 2010 -- plans to stand for a seat in parliament in a constituency near the main city Yangon.
Washington broke off full diplomatic ties with Myanmar in 1990 after Aung San Suu Kyi's National League for Democracy won elections but was barred from power.
- AFP/wk
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