Chavez, Kirchner hold talks

The Argentine President, Nestor Kirchner, has held talks in Venezuela with his counterpart Hugo Chavez. Discussions focused on Venezuela's entry to the Mercosur trade bloc in December, Venezuelan officials said. The leaders also discussed a $4bn gas pipeline spanning more than 12,000km between the two countries as part of a network involving Peru and Brazil.

As well as signing several energy accords, the two men proposed creating an investment fund for Latin America. Mr Chavez said such a fund would be used to spearhead regional integration, eventually paving the way for a South American Union.

The BBC's Greg Morsbach in Caracas says this was one of the more striking proposals to emerge from an ambitious list of agreements drawn up by the two left-wing leaders in just 24 hours. Mr Chavez has said a strong relationship with Buenos Aires is crucial to South American unity.

It is the Argentine president's third visit to Venezuela. The meeting comes as Mr Chavez is embroiled in a diplomatic row with his Mexican counterpart, Vicente Fox, after a dispute over free trade. Mr Chavez gave Mr Kirchner a tour of a hydroelectric power plant in the eastern city of Puerto Ordaz, about 500km (310 miles) from Caracas, where they greeted workers. Media reports have said the pair are keen to press ahead with the proposed gas pipeline project as a way of strengthening regional integration.

The two leaders want it to be the cornerstone of a massive South American web of pipelines connecting Peru in the west with Venezuela in the north, Brazil in the east and Argentina in the south.

Venezuelan Foreign Minister Ali Rodriguez said the two leaders had also spoken about his country's entry to Mercosur. "Argentina has agreed to provide complete support for Venezuela in all negotiations to become a full member," Mr Rodriguez told the state television news channel.

Mr Chavez said on Sunday that the South American trade bloc was an alternative to the proposed Free Trade Area of the Americas (FTAA) backed by the US.

The FTAA divided Latin America during the Summit of the Americas held in Argentina earlier this month. Mr Chavez and Mr Kirchner were also expected to discuss Argentina's public debt. Argentine media reported that President Kirchner would ask Venezuela to buy up to $300m in government bonds.

Venezuela has already bought $950m in bonds this year from cash-strapped Argentina, in what Mr Chavez has called a step toward creating a bank to help provide financing to the region, reports the AP. Photo:AP I.L.