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Venezuelan President Hugo Chavez enveloped his Iranian counterpart Mahmoud Ahmadinejad in a bear hug yesterday, as the two men planned to underscore their anti-U.S. rhetoric with a series of investment deals.

In a typically wordy speech, the robust ex-paratrooper lambasted their common enemy, Washington.

"If the U.S. empire succeeds in establishing its dominance, there will be no future for humanity. Therefore, we should save humanity and end the American empire," Mr. Chavez told a crowd at the University of Tehran.

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Mr. Chavez and Mr. Ahmadinejad are both ex-military populists who take a hawkish stand on price in the OPEC oil cartel. The two men enjoy a close personal rapport.

Venezuelan Energy and Mines Minister Rafael Ramirez echoed the defiant spirit by threatening to cut oil exports to the United States if Washington did not drop its hostile stance toward Mr. Chavez's administration.

The website of the U.S. Energy Information Administration says 11.8 per cent of U.S. oil imports came from Venezuela in 2004. The United States is the main buyer of Venezuelan oil.

Iran's Oil Minister, Kazem Vaziri-Hamaneh, said Iranian company Petropars Ltd. would invest $4-billion (U.S.) in two Venezuelan energy projects.

Petropars is already certifying some tarry crude in the Orinoco Belt and is looking to develop reserves there. It is also seeking to supply training and services to the Norte de Paria offshore gas field.

However, it was not immediately clear what contracts would be signed, with Mr. Chavez also discussing co-operation on pharmaceuticals and tractors.

Mr. Ramirez mentioned the possibility of exporting petrol to gas-guzzling Iran. Although the world's No. 4 crude oil exporter, Iran lacks the refinery capacity to produce enough gasoline for itself.

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Iranian investors have already poured $1-billion of investment into Venezuela, primarily in sectors such as energy, construction and tractor-building.

Although commercial deals are proceeding, some analysts have remarked that Mr. Chavez's dependence on the United States as a buyer for his oil will probably keep him from striking any arms deals with Tehran. Caracas is looking mainly to Russia for weapons.

Mr. Chavez also lambasted Iran's arch-enemy Israel and its offensive against Lebanon as "both fascism and terrorism." This agreed with the tone of Iran's president, who has compared Israel's conduct to that of Adolf Hitler.

A beaming Mr. Ahmadinejad presented Mr. Chavez with the golden "High Medallion of the Islamic Republic of Iran" and slipped a blue sash around his chest. "Mr. Chavez is my brother, the brother of the whole Iranian nation and of all freedom-seeking people in the world," he said. "He is a perpetual warrior against the dominant system."

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