"President Obama... Must, and he's said it himself, go all the way and bring an end to this vestige of the Cold War," Hollande said after meeting with the 84-year-old Cuban leader.
Castro is on his first official trip to the European Union since taking over from his elder brother Fidel in 2006.
France has led the way in welcoming Cuba back into the diplomatic fold since the Caribbean island restored relations last year with the United States, after more than half a century of enmity.
Castro is the second former pariah to be welcomed to Paris in a matter of days, after Hollande hosted Iranian President Hassan Rouhani last week.
He was formally welcomed today under the Arc de Triomphe before being driven down a virtually deserted Champs-Elysees avenue decked out in Cuban flags.
Police severely restricted access to spectators, and just a few groups of supporters of the Cuban regime were present.
Havana hopes the visit will allow Cuba to "widen and diversify its relations with France in all possible areas -- politics, economics, trade, finance, investment, culture and cooperation," said Rogelio Sierra, Cuba's deputy foreign minister.
Trade delegations have been flocking to Cuba, hoping to cash in on its highly trained workforce and natural assets such as its sun-drenched Caribbean beaches, a draw for tourists.
Cuba, meanwhile, needs to tap new sources of income as its main ally and financial backer, Venezuela, is mired in economic and political crisis.
France and Cuba signed deals on tourism, transport and fairtrade goods.
Some of France's largest companies already invest in Cuba, including telecoms group Alcatel-Lucent, and energy firms Total and Alstom.
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