Attending the inauguration were mostly Central American and Caribbean leaders, as well as Crown Prince Felipe of Spain.
Caribbean leaders may see Mr. Castro as a useful card to play to get Washington's attention, "but I'm not sure even that is true," the diplomat added.
Caribbean leaders praised the plan.
The US and other Caribbean leaders persuaded squabbling Grenadian politicians to accept him as a compromise to prevent an electoral comeback by Mr Gairy.
But Mr. Clinton did not win support for a proposed American solution to a dispute over bananas that has pitted him against what he called his "fellow Caribbean leaders."
Many Caribbean leaders contend that the United States forced President Jean-Bertrand Aristide from power in 2004.
But the warming relations also reflect English-speaking Caribbean leaders' growing impatience with what they see as Washington's lack of interest in their development and rigidity toward Mr. Castro.
"There is no reason to indemnify them whatsoever," he said at a news conference at the beginning of the meeting of dozens of European, Latin American and Caribbean leaders.
A recent summit of Latin American and Caribbean leaders saw unanimous support from all 32 countries for Argentine claims to the Falkland Islands.
Following Fidel Castro's illness and temporary transfer of power Caribbean leaders sent get-well-soon messages to Castro.