In a telegram sent to Cuba's current President Raul Castro -- brother of the revolutionary who died yesterday aged 90 -- the Spanish monarch expressed his condolences and noted his "family links with Spain", Cuba's colonial power until 1898.
The brothers' father was born in the northern Spanish village of Lancara.
"The great closeness between Cuba and Spain means that everything that affects Cuba is felt very strongly here," the king wrote.
Around a dozen demonstrators shouted "The tyrant is dead!" and clinked glasses to cheer the death of a man loathed by many for crushing his opponents but seen as a hero by supporters of the revolution for his fight against capitalist domination.
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The anti-Castro protesters were booed by a much larger group of around 150 Spanish and Cuban demonstrators -- many of them members of the Spanish communist party -- cheering "Long live the revolution!"
Rigoberto Carceller Ibarra, a Castro opponent from the group Cuba Democracia Ya ("Cuba Democracy Now"), accused the late leader of "stealing the revolution" and imposing a "hereditary monarchy".
But Luis Perez, president of a pro-revolutionary Cuban group in Madrid, told AFP: "Fidel brought us true independence and gave us everything: health, education."
Spanish Prime Minister Mariano Rajoy also sent his condolences via Twitter, describing Castro as "a figure of historic significance".
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