Speaking just days after United States President George W Bush said he would begin tight enforcement of an existing ban on travel by US citizens to the island nation, Rice said Castro's crackdown on dissidents have brought him worldwide condemnation.
"This needs to be an international effort," she told a meeting of the Inter American Press Association in Chicago on Monday.
"It is unacceptable that Cuba remain in the state that it does in this hemisphere at a time when democracy and freedom and prosperity are within grasp ... it should not be that the Cuban people are forgotten."
Speaking by a video connection from her Washington office, Rice told the Chicago meeting she could not predict when a stepped-up enforcement of travel restrictions would begin but "I can tell you that there is a process to begin immediately enforcing these ... restrictions as quickly and fully as possible."
"It is unacceptable that Cuba remain in the state that it does in this hemisphere at a time when democracy and freedom and prosperity are within grasp"
US national security chief
"We know there are a lot of people who are using the travel opportunities to go to Cuba in ways that wind up enriching the Cuban government because the Cubans are able to take the money in hard currency to then pay the workers in pesos and to pocket the difference ... it is simply unacceptable," she said.
"We do not want to enrich the tyrannical government of Fidel Castro. We do not want to allow him to use these monies to fund his tyranny, his crackdown on dissidents," Rice said of the Cuban government.
Reacting, Cuba rejected the renewed pressure from Washington for reforms and said Bush was "dreaming" of a post-Castro transition.
A Cuban foreign ministry statement in Havana said steps announced by Bush to hasten political change on the island were aimed at securing the votes of the Cuban exile community in Florida, the pivotal state in his controversial 2000 election.