Powell told his 34 colleagues from Latin America and the Caribbean that any such steps would be consistent with the OAS Inter-American Democratic Charter, approved in 2001.
The charter, Powell said in a speech, "declares that the people of the Americas have a right to democracy. It does not say the peoples of the Americas except Cubans have a right to democracy."
The Cuban issue generally has been off-limits for the OAS, which is holding its annual meeting of foreign ministers here. The United States over the decades has not encouraged an active role for the OAS.
OAS reluctance to tackle the issue was reflected in the tepid response of member states to sign a U.S.-backed declaration earlier this spring criticizing the Cuban crackdown on pro-democracy activists.
Seventeen OAS members signed the declaration while 17 others chose not to. Most of the opposition came from Caribbean countries, which have contended that any OAS action on Cuba would be inappropriate because Fidel Castro's government is not in a position to defend itself.
The Cuban government was excluded from the OAS in the early 1960's on grounds that the country's Marxist-Leninist system was incompatible with hemispheric principles.
Powell criticized the March crackdown on Cuban dissidents, saying these activists were merely seeking to "act on their basic human rights."
He also protested what he called the "harsh sentences" meted against them.
The European Union and the United States have reacted sharply to the crackdown. The EU has said it is cutting back on high-level visits to Cuba and reducing ties in other areas.
The Cuban government insists that the activists were subversives who collaborated with the U.S. diplomatic mission in Havana. The government staged an anti-American rally Saturday in the Cuban capital.
The principal theme of the OAS meeting is the strengthening of democracy in the hemisphere.
En route here on Sunday, Powell said he does not believe the opposition of Chile and Mexico in the U.N. Security Council to the Iraq war will affect U.S. relations with the two over the long term.
"Wounds heal; sometimes they leave scars, sometimes they don't," he said Sunday. "I don't see any lasting scars here."
Besides his speech, Powell planned meetings Monday with Chilean President Ricardo Lagos and OAS Secretary General Cesar Gaviria. Also scheduled were bilateral meetings with the foreign ministers of Chile, Colombia, Brazil and Peru. He also is expected to meet with a delegation of Caribbean foreign ministers.
On Tuesday, Powell makes a brief visit to Argentina, where he will meet with the newly installed president, Nestor Kirchner.
"The United States stands ready to help," Powell said, alluding to Argentina's economic difficulties.
"I really want to listen to him (Kirchner) as he tells me about his plans, his aspirations, what he hopes for his administration." the secretary said.
By George Gedda