Trump administration officials traveled to Havana last week and met Cuban government representatives, including the grandson of former Cuban leader Raul Castro, according to a report Friday by the Axios news website.
The website noted that last Friday was the first time a US government plane landed in Cuba since former President Barack Obama visited the island 10 years ago.
The grandson, Raul Castro, is considered by US officials a key spokesperson for his grandfather, who still holds power in Cuba.
US officials told their Cuban counterparts that Cuba's economy is rapidly declining and that the country's leaders have a limited time to carry out reforms before the situation gets worse.
The US set out several conditions, including the release of political prisoners, greater freedoms for Cubans and payment to Americans whose properties were taken by the Cuban government after the 1959 revolution.
A senior State Department official told Axios that President Donald Trump prefers a diplomatic solution but will not allow Cuba to become a threat to US national security.
Cuba has faced a prolonged economic crisis marked by fuel shortages, rolling blackouts and limited access to food and medicine. Cuban officials attribute much of the hardship to decades-long US sanctions, while American officials argue that structural economic issues are to blame.