President Hugo Chavez of Venezuela has sought to deflect a growing dispute with Mexico by blaming the US for sowing discord in Latin America.

Wearing a wide-brimmed Mexican sombrero, Mr Chavez told thousands of supporters at a weekend rally in Caracas that the row was not with the Mexican people but their pro-US president, Vicente Fox. Venezuela and Mexico downgraded their diplomatic relations last week in a dispute over Mexico's support of the Free Trade Area of the Americas (FTAA).

Matters came to a head when Mr Chavez called his Mexican counterpart a "lapdog of the American empire" and later warned Mr Fox "not to mess" with him.

Mr Chavez entertained the crowd on Saturday by singing several Mexican ballads and then going on to explain how President George Bush was responsible for the bad feeling.

"The one to blame for all this lamentable conflict is none other than Mr Danger," he said in reference to the US leader.

Some of those in Mr Chavez's audience carried replica coffins bearing Mr Bush's name. Others held up banners with the words "No to Yankee imperialism".

In a long speech, Mr Chavez repeated his description of Mr Bush as a "madman, a killer and a mass murderer".

The crowd applauded when the populist leader launched a tirade against the FTAA proposals spearheaded by the US. "They can stick their FTAA - the FTAA can go to hell!" he shouted. "We won't be colonised again."

But he struck a conciliatory chord towards Mexico. "The wounds will heal eventually," Mr Chavez told his followers. "We hope things calm down. The ball is now in the court of the Mexican government."

There has been no official reaction yet from the Mexican government to Mr Chavez's outbursts. But the Mexican author and columnist Carlos Fuentes told a prominent newspaper: "I think it is a mistake to get into a dispute with someone like Hugo Chavez. It doesn't make sense ...

"He's a passing clown who produces petrodollars. We should not allow an unnecessary dispute to be converted into a matter of defending the republic, which is what Vicente Fox is trying to do."

The political rift between Venezuela and Mexico centres on fundamentally different visions for a free zone covering North and South America.

Mr Fox is in favour of establishing a free trade area stretching from Alaska to Patagonia. Mr Chavez is pushing for the creation of a trade pact he calls the Bolivarian Alternative for the Americas.

So far, only Cuba has signed up to his project , but Mr Chavez says he is confident the leaders of Brazil, Argentina, Uruguay and Paraguay share his vision for such an agreement.

The charismatic firebrand president wants to lead Venezuela into what he calls "socialism of the 21st century" using profits from the oil industry to carry out his Bolivarian revolution, named after the 19th century liberator of South America, Simon Bolivar.

But Washington accuses Mr Chavez of being a dictator and of wanting to set up "a second Cuba" in Venezuela.

President Nestor Kirchner of Argentina was expected in Caracas early today to offer his help in resolving the dispute between the governments of Mexico and Venezuela.

Guardian Unlimited © Guardian Newspapers Limited 2005

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