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THE Rev. Jesse Jackson says it's time to begin talking with Cuban leader Fidel Castro Ruz.

As hundreds of Cubans bob on home-made rafts in the Florida Straits, the Rev. Mr. Jackson told a breakfast meeting with reporters: ``This matter of Cuba can be resolved in negotiations.''

Over the weekend, Clinton administration officials appeared to agree - up to a point. They announced limited talks on migration will begin with Cuba later in New York this week.

Yet President Clinton, like several presidents before him, resists a wide-ranging dialogue with Cuba.

Jackson suggests America's Cuba policy is too often driven by domestic political concerns involving the large Cuban-American community rather than the long-range interests of the United States. He would begin with an ``aggressive effort'' to open up trade between Cuba and the US. In concert with trade, he would pressure Cuba on key human rights issues, including political prisoners and free elections.

He says: ``It seems that our problem with Castro is more of an ego problem. Our leaders don't quite have the guts to get past the mythology of Castro.''

Looking ahead to 1996, Jackson had words of caution for Mr. Clinton, for whom he campaigned in 41 states in 1992. He says if the president continues to heed Republicans more than black voters, if he emphasizes jails more than jobs, then Jackson will consider his options ``wide open'' in the next campaign - including a possible independent candidacy.

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