U.S. influence has waned in recent years in a region it traditionally saw as its backyard, allowing China to gain ground and emerge as the No. 1 trade partner with various countries, including regional powerhouse Brazil.
"If the United States realizes its long-term strategic interests are not in Afghanistan or Pakistan, but in Latin America ... there will be great results," President Juan Manuel Santos said just before Obama arrived in Colombia.
Obama had a rapturous welcome at the last Summit of the Americas in 2009. But Latin American hopes, including for a U.S. rapprochement with communist-run Cuba, have been largely dashed as Obama has focused on other global priorities.
Santos' comments came in a speech to hundreds of businessmen from North and South America meeting before the Organization of American States' sixth summit attended by more than 30 heads of state in the historic Caribbean port of Cartagena.
In a reminder of Colombia's recent bloody past of guerrilla and drug violence, two small bombs exploded in a ditch in residential district of Bogota, near the U.S. Embassy.
Police said some windows were broken in nearby buildings, but there were no injuries in the explosions in the capital, which is about 600 miles from Cartagena.
They suspected leftist rebels, who have been beaten back but not defeated by the state in a decade-old, U.S.-backed offensive. "It might be a protest by an urban guerrilla cell against Obama's presence," a senior police source told Reuters.
In Cartagena, there were reports by some residents of another explosion in an empty lot. Police said they could not confirm a bomb had gone off, and Reuters TV images of some dented metal plates were inconclusive.
Also on Friday, the U.S. Secret Service, which is responsible for protecting Obama, said it recalled a number of agents from Colombia because of alleged misconduct.
"These personnel changes will not affect the comprehensive security plan that has been prepared in advance of the president's trip," agency spokesman Edwin Donovan said in a statement.
In visits to Cartagena by Bill Clinton and George W. Bush during their presidencies, police discovered and foiled assassination plots by Colombian rebels.
CHAVEZ COMING?
With deep ideological fissures dividing Latin America over the past decade, Santos urged fellow heads of state - who meet formally on Saturday and Sunday - to follow his example of putting pragmatism first.
"Let's respect our differences, but stay together. Who would have imagined Venezuela and Colombia working together?" asked Santos, whose first action after taking office in 2010 was to bury the hatchet with socialist President Hugo Chavez next door.
Chavez, who has been undergoing radiation treatment for cancer, said his doctors would decide if he could go to Cartagena. But he scoffed at the meeting, saying it was pointless because Cuba was not invited due to U.S. opposition.
"We should put an end to the summits," Chavez said in a speech to tens of thousands of supporters in downtown Caracas.
Most of the 30 or so presidents attending the summit had arrived by Friday, some donning traditional loose-fitting "guayabera" shirts to cope with the heat in tropical Cartagena.
Latin America has weathered the global economic storm better than other parts of the globe, with enviable growth rates.
Inter-American Development Bank head Luis Alberto Moreno said the region contributed 14 percent of global GDP, was enjoying annual growth of about 4 percent, and looked on course to double per-capita income by 2030.
"Latin America is one of the motors of world economic recovery," he said.
Mexican President Felipe Calderon pleaded for an end to protectionism emerging in response to a flow of funds from rich nations that has boosted currencies and hurt competitiveness.
One of Latin America's biggest free trade advocates, Mexico feels particularly bruised by protectionist moves by fellow heavyweight economies Brazil and Argentina.
"If you want to have an industry that exports, don't protect it. If you want to have a child that walks, don't protect it from walking," Calderon said.
As well as trade tensions, feelings were running high over Cuba, again excluded from the hemispheric bash. Ecuador has boycotted the summit in solidarity, and Latin America is broadly united against the U.S. sanctions on Cuba.
"We have arrived with the conviction that this must be the last summit without Cuba," Bolivian President Eva Morales said.
In visits to Cartagena by Bill Clinton and George W. Bush during their presidencies, police discovered and foiled assassination plots by Colombian rebels.
OVATION FOR SHAKIRA
Passions are also high over the 30th anniversary of the 1982 Falklands War between Britain and Argentina.
"There should not be colonial possessions in our America," Venezuelan Foreign Minister Nicolas Maduro said in support of Buenos Aires' demand for a negotiation of the island's sovereignty from Britain.
Another big issue on the summit agenda is drugs, with Latin American leaders clamoring for a new approach to beat traffickers and reduce violence in the region.
Many want to start a discussion on legalization to cut the vast profits of the trade. But Obama, seeking to avoid upsetting voters ahead of a re-election bid in November, opposes that.
In an interview with a Colombian radio station, Obama did, however, take a conciliatory line in echoing the region's oft-cited complaint that the United States is the biggest consumer and so must sort out the problem at its end.
"In the United States we have a responsibility to reduce demand for drugs," he told the Radio W station.
Colombian singer Shakira brought a feel-good factor to proceedings, drawing the only standing ovation of the day after appealing for corporate support for her children's charity.
Away from the serious issues, there was plenty to entertain the thousands of visitors to Cartagena: from sun-kissed beaches and local dance troupes, to a soccer match between teams led by Presidents Santos and Morales.
The presidents played out a diplomatic 2-2 draw, with Santos' team aided by former Colombian star Faustino Asprilla.
Twenty thousand soldiers and police kept watch on the proceedings from air, land and sea.
In visits to Cartagena by Bill Clinton and George W. Bush during their presidencies, police discovered and foiled assassination plots by Colombian rebels.
(Additional reporting by Mario Naranjo, Luis Jaime Acosta and Brian Ellsworth in Cartagena, Anthony Boadle in Caracas and Julia Cobb in Bogota, and Jeff Mason and Diane Bartz in Washington; Editing by Anthony Boadle and Peter Cooney)
Reuters