Chavez blasts Colombia's Uribe

By Brian Ellsworth

CARACAS (Reuters) - Venezuelan President Hugo Chavez on Sunday accused Colombian President Alvaro Uribe of lying in a dispute over his efforts to free rebel hostages, saying he had "frozen" ties because of the spat that threatens to harm trade.

Uribe last week suspended Chavez's role as mediator in negotiations with Colombia's FARC rebels over hostages taken in the conflict. The U.S. ally accused Chavez of overstepping his bounds and disclosing details of private talks.

The two leaders have maintained a pragmatic relationship despite their sharp ideological differences, but the row over the hostage talks has fuelled tensions between the two countries with more than $6 billion in annual bilateral commerce.

"They issued a statement yesterday filled with lies, and that is serious, very serious," Chavez said during a televised broadcast. "President Uribe is lying, and he's lying in a shameless way."

Chavez appeared to be referring to Colombia's statement on Saturday saying Chavez had been pushed out of the talks for speaking directly with a Colombian general about hostages despite an agreement with Uribe not to do so.

He described Uribe decision as a "spit in the face," in marked contrast to his calm acceptance of the news last week.

Responding later, Uribe charged Chavez with siding with the FARC in his mediation and accused the self-styled socialist of seeking to promote an "expansionist" plan inside Colombia.

"The truth President Chavez, is that we need mediation against the terrorists not one that legitimizes terrorism," Uribe said. "The truth president Chavez is that if you are fomenting an expansionist project in the continent, it has no entrance in Colombia."