Castro says he is stable and "Everything is working"

HAVANA, Aug 2 (Reuters) Fidel Castro told his people he was in good spirits and stable after surgery that has raised speculation his illness might be the beginning of the end of his 47-year rule.

Days short of his 80th birthday, Castro issued a statement yesterday playing down talk he might be at death's door after an operation to halt stomach bleeding that forced him to temporarily relinquish power to his 75-year-old brother, Raul.

A state-run television announcer who said he had just spoken to Castro quoted the Cuban president as saying the Caribbean island was functioning well in his absence.

Castro, who last appeared in public giving a July 26 speech, did not appear on screen and there was no recording of his voice. He gave no indication of when he would be able to resume his government duties.

''The important thing is that everything is working and will continue to work perfectly well in the country,'' he said. ''I am in perfectly good spirits,'' he said.

Castro said in a statement on Monday he had to temporarily hand over the reins of the country of 11 million people to his defense minister brother, sparking celebrations by US Cuban exiles hoping for an end to Cuban communism.

Brazilian President Luiz Inacio Lula da Silva, a long-time friend of Castro, said in Brasilia Cubans alone should decide on a possible presidential successor.

''The succession process is a decision the Cuban people will have to make,'' Lula told reporters, adding Castro may recover and ''the situation may not be as bad as it appears.'' NO US SOFTENING In Washington, the Bush administration, which has tightened a long embargo of Cuba, dismissed any possibility of a softer stance.

''Raul Castro's attempt to impose himself on the Cuban people is just much the same,'' White House spokesman Tony Snow said. ''There are no plans to reach out.'' Raul, Fidel Castro's designated successor, has assumed the posts of Communist Party head, armed forces' commander-in-chief and president of the Council of State. Party officials expressed backing for the ex-guerrilla, who has spent decades in his brother's shadow.

Some Cubans, although concerned about Castro's health, believe a well-planned succession under the ruling Communist Party was under way.

''Raul is a revolutionary leader without doubt and the revolution is safe with him,'' said Armando Diaz, a local party leader in Havana, dressed in green fatigues.

Seven out of every 10 Cubans were born after Castro's revolution and know no other system than the one-party communist state he built on the United States' doorstep.

Opinion can be hard to measure in a tightly controlled society like Cuba. Many here, still suffering from economic deprivation since the collapse of Castro's supporter the Soviet Union in 1991, are too busy coping with the needs of daily life to think about the future, let alone get involved in dissent.

National Assembly President Ricardo Alarcon sought to calm concern that Castro's death might be imminent. The Cuban president has defied repeated assassination attempts and frequent reports of his demise throughout the decades.

''The Cuban leader will always fight until the last moment. But that last moment is very far away,'' he said.

REUTERS DKB PM1150