Chavez Urges Latin American Allies to Begin Withdrawing Billions of Dollars From US Banks

CARACAS, Venezuela (AP) -- Venezuelan President Hugo Chavez urged his Latin American allies on Saturday to begin withdrawing billions of dollars in international reserves from U.S. banks, warning of a looming U.S. economic crisis.

Chavez made the suggestion as he hosted a summit aimed at boosting Latin American integration and countering U.S. influence.

"We should start to bring our reserves here," Chavez said. "Why does that money have to be in the north? ... You can't put all your eggs in one basket."

To help pool resources within the region, Chavez and other leaders launched a new development bank at the summit of the Bolivarian Alternative for the Nations of Our America, or ALBA.

The left-leaning regional trade alliance supported by Chavez is intended to offer an alternative, socialist path to integration while snubbing U.S.-backed free-trade deals.

Chavez noted that Secretary of State Condoleezza Rice visited Colombia in recent days, saying "that has to do with this summit."

"The empire doesn't accept alternatives," Chavez told the gathering, attended by the presidents of Bolivia and Nicaragua, Cuban Vice President Carlos Lage, and other leaders.

Chavez warned that U.S. "imperialism is entering into a crisis that can affect all of us" and said Latin America "will save itself alone."

Rice left Colombia on Friday after a trip aimed at reviving a free trade deal that has stalled in the U.S. Congress. She sidestepped an opportunity to confront Chavez, who accused Colombia and the United States of plotting "military aggression" against Venezuela.

Chavez took up the issue again on Saturday, saying, "I warn the world of the following: The U.S. empire is creating the conditions to generate an armed conflict between Colombia and Venezuela."

Formerly cordial relations between the two nations have been tense since November, when Colombia's U.S.-allied president, Alvaro Uribe, said Chavez was no longer welcome to continue mediating a hostages-for-prisoners swap with Colombia's leftist rebels.

Nicaraguan President Daniel Ortega backed Chavez in the dispute at the summit, saying "the heating up (of tensions) toward Venezuela is toward the ALBA" as a whole.

He also joined Chavez in his criticism of U.S.-style capitalism, saying "the dictatorship of global capitalism ... has lost control." Three days earlier, Ortega had shouted "Long live the U.S. government" as he inaugurated an American-financed section of highway in his country.

The leaders signed a series of accords at the end of the summit pledging cooperation in areas from energy to agriculture, plus a document denouncing "the warlike attitude of the U.S. government and its attacks against our governments."

A spokeswoman for the U.S. Embassy in Caracas rejected that characterization. "A door is always open to dialogue and cooperation on issues of mutual concern," Robin Holzhauer said.

Chavez welcomed the Caribbean island of Dominica into the ALBA -- an acronym that means "dawn" in Spanish -- joining Nicaragua, Bolivia and Cuba.

Chavez said a new fund created by Venezuela and Iran to support projects in third countries would have links to the ALBA Bank.