* Arab League also considers proposal for peace commission
* Socialist Chavez is old friend of Libya's Gaddafi
* Venezuela hopes Brazil's Lula will lead mediation (Adds Lula plan, foreign ministers talk)
By Frank Jack Daniel
CARACAS, March 3 Libyan leader Muammar Gaddafi has accepted a proposal by his ally Venezuelan President Hugo Chavez for international mediation to end an uprising in the North African country, a Chavez spokesman said on Thursday.
Reports Chavez's proposal was being taken seriously by Arab leaders pushed down oil prices after a days-long rally on worries violence in Libya will hit supplies. [ID:nLDE7220IX]
Like Gaddafi, Chavez casts himself as an anti-imperial revolutionary and has visited him in Libya six times.
Analysts are skeptical Chavez can bring any immediate end to fighting in Libya, where Gaddafi faces an increasingly organized rebel army. [ID:nLDE72200E]
Information Minister Andres Izarra said Venezuela's foreign minister spoke on Thursday with his Libyan counterpart, who confirmed that Gaddafi's government supported the idea of an international commission.
Izarra confirmed the Arab League had shown interest in Chavez's proposal to send an international commission to talk with both sides in Libya.
"Libya accepts the proposal to work for a negotiated end to the conflict accompanied by an international commission," Izarra told Reuters. "Venezuela will continue its contacts in the Arab world and elsewhere to find formulas for peace."
Possibly seeking to increase the credibility of their mediation proposal, a government source, who asked not to be named, said Venezuela hoped to convince Brazil's former president Luiz Inacio Lula da Silva to lead the peace mission.
There was still no provisional date for a peace mission, however, the source said. "Everything's at a very preliminary stage, with very delicate and unstable negotiations."
Factbox on Chavez-Gaddafi friendship [ID:nN03165400]
Analysis on Chavez-Gaddafi ties [ID:nN25251896]
Full coverage of Middle East unrest [ID:nLDE7102CH]
Venezuelan Foreign Minister Nicolas Maduro said on Wednesday that the Chavez government hoped soon to form a commission to talk to Gaddafi's government and the opposition.
Chavez says he believes Washington exaggerates reports of repression by his friend to justify an invasion of Libya.
Olivier Jakob, of Swiss-based research firm Petromatrix, said Chavez's proposal was unlikely to be popular with the rebels.
"Chavez's credibility does not fly very high," he said. "The only value of such a proposal is if it offers some honorable way out for the Gaddafi clan. The only value is if it offers a face-saving way out to exile."
Venezuela has been widely mentioned as a possible destination for Gaddafi if he abandons his country after 41 years in power. He visited the South American fellow OPEC member in 2009, donating a Bedouin tent to Chavez, who has a 11,000-seat stadium named after him in Libya.
Earlier, the chairman of the rebel National Libyan Council entirely rejected the concept of talks with Gaddafi. Arab League President Amr Moussa told Reuters the Chavez plan was only under consideration and that it was up to Venezuela to release more details of its substance.
A small group of Venezuelans opposed to Chavez demonstrated outside the Libyan Embassy in Caracas calling the president an apologist for "assassin" Gaddafi. (Additional reporting by Eyanir Chinea)
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