Venezuela's President Hugo Chavez (left) and his Brazilian counterpart Luiz Inacio Lula da Silva attend a ceremony of a signing of an agreement between the companies Braskem and Pequiven at the petrochemical complex of Jose in the eastern city of Barcelona yesterday. - Reuters

PORLAMAR, Venezuela (Reuters):

South America's political heavyweights clashed over ethanol, exposing a rift yesterday at the start of an energy summit that host Venezuelan President Hugo Chavez hoped would cement anti-U.S. unity.

Brazilian President Luiz Inacio Lula da Silva, the leader of the continent's largest economy who has moved closer to U.S. President George W. Bush over ethanol output, swiped at Chavez, rejecting his fellow leftist's criticism of their plan.

Chavez, who wins political influence with subsidised oils exports to neighbors, denounced Bush's project to promote ethanol production in developing countries as a sure-fire way to increase hunger by lifting food prices.

But Lula, who was set to take a tour of a petrochemical plant with Chavez in a show of unity with his usually close ally, said there was sufficient arable land in South America.

"We have a huge territory, not only in Brazil, but in all South American countries, and Africa, which can easily produce oil seeds for biodiesel, sugar cane for ethanol, and food at thesame time," Lula said on his weekly radio show before his arrival in Venezuela.

Aides to Lula say ethanol is his "obsession" despite being labeled genocidal by Cuban leader Fidel Castro, Chavez's political mentor.

Venezuela, the fifth-largest exporter of oil to the United States, has urged Latin America to pass over ethanol and instead rely on the OPEC nation's vast oil reserves and cooperate in developing ways to reduce energy consumption.

"I hope we can have an opportunity to discuss this issue" at the 12-nation meeting, Lula said.

But Chavez wants the South American summit on the Caribbean tourist island of Margarita to focus on regional integration as a counterweight to the United States and can expect support from the leaders of countries such as Bolivia and Ecuador.

"Gradually the U.S. empire will end up a paper tiger and we the peoples of Latin America will become true tigers of steel," Chavez said on the eve of the summit after touring projects jointly run with other U.S. antagonists Cuba and Iran.