While it allowed the meeting to go ahead, Castro’s government expelled a number of European politicians and reporters to prevent them attending.
About 200 dissidents chanted “Freedom, Freedom” and “Down with Fidel Castro” at the meeting in an orchard on the outskirts of Havana as they called for democratic change and the release of political prisoners.
It was the first general meeting of the Assembly to Promote Civil Society, a US-backed umbrella organisation that joins dozens of small dissident groups across Cuba.
A handful of US and European diplomats attended the meeting, but observers from Europe were ejected or detained.
Police picked up Czech senator Karel Schwarzenberg and German Bundestag member Arnold Vaatz and put them on flights back to Europe.
A reporter for the Italian newspaper Corriere della Sera was detained, causing the Italian government to summon Cuba’s ambassador to Rome.
Authorities also expelled three Polish journalists, a Polish diplomat said.
Dissident economist Martha Beatriz Roque, who organised the meeting, said the expulsions showed the “totalitarian” nature of Castro’s government.
“No state, no regime, no party has the right to control a whole nation. That is why we are here,” said Ms Roque, who has spent four of the last eight years in jail.
A previous meeting of opponents of Castro in 1996 was called off after police arrested most of its leaders.
US President George W Bush praised the dissidents for their courage in coming out of the “shadow of repression” in a video message played to the meeting from a laptop computer.
Cubans attending the gathering, including the wives of jailed dissidents, were excited by their first meeting.
But the country’s small dissident movement, which is recovering from a crackdown in March 2003, remains divided.
Several opposition groups stayed away from the meeting because they disagree with Ms Roque’s close ties with right-wing exiles in Miami and funding from the US.
“This meeting does not represent the majority of the opposition,” said Oswaldo Paya, Cuba’s most prominent dissident and winner of the European Union’s top human rights award, the Sakharov Prize.