But it mirrors what happened in Vietnam as ties warmed between the two former foes during the early 2000s.
As in Vietnam Obama stopped short of issuing any kind of apology for American military action, but recognised the suffering it had caused all sides.
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"The remnants of war continue to shatter lives here in Laos," he said, adding many Americans were still unaware of their country's secret carpet bombing of the country.
"Over the years thousands of Laotians have been killed or injured. Farmers tending their fields, children playing. The wounds, a missing leg or arm, last a lifetime."
Obama's visit is laden with historic symbolism given the two countries' bellicose pasts.
Earlier in the day, under pouring rain, the first US president to hail from the post-Vietnam war generation met his Laos counterpart Bounnhang Vorachith -- a former revolutionary of the communist Pathet Lao movement that successfully faced down his predecessors' bombing campaigns.
Bounnhang, 78, was anointed the country's top leader earlier this year.
Laos' ageing communist leadership has ruled with an iron fist since 1975, tolerating little dissent and only gradually opening the country to outsiders.
The nation has had one of Asia's fastest growth rates over the last decade, but critics say little has trickled down to the rural poor majority.
As it did in Vietnam, Washington has also been pushing the Laos authorities for help in locating the remains of missing servicemen.
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The White House said the remains of 273 personnel have been located and identified from the Laos war years but 301 Americans are still listed as missing.
More than two million tonnes of bombs were dropped by the United States on Laos. About 30 percent did not explode, including an estimated 80 million cluster munition "bomblets".
Some 50,000 people were killed or injured by bombs between the start of the war and 2008, according to Laos government data.
Bomb clearances and education campaigns have since reduced the casualty rate to around 40 people a year. But only one percent of contaminated land has so far been restored.
During his speech Obama singled out Channapha Khamvongsa, a Laos-American campaigner whose group Legacies of War has long lobbied Washington to spend more on bomb clearances.
She said she was "thrilled" by the donation.
"This is a major step forward to healing the wounds of war and increasing cooperation between the US and Lao PDR," she told AFP.
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