abcnews.go.com Jan. 10 — By Pascal Fletcher

CARACAS, Venezuela (Reuters) - Embattled Venezuelan President Hugo Chavez vowed to "tighten his grip" on Friday to fight a 40-day-old opposition strike after a grenade attack and bomb threats targeted foreign embassies in Caracas.

Vowing to resist opponents' calls to resign, the left-wing former paratrooper said he would do everything necessary to counter the strike, which has crippled oil output and exports in the world's No 5 petroleum exporter.

A grenade exploded late on Thursday at the Caracas residence of the ambassador from Algeria, which has offered to assist the Venezuelan leader in his fight to beat the strike.

The oil industry shutdown, now in its sixth week, is pushing up oil prices. In London, Brent crude was up 21 cents at $29.85 while U.S. light crude traded up 12 cents at $32.11.

Venezuelan banks and supermarkets closed their doors for the second consecutive day on Friday in support of the grueling strike, called by opposition leaders to press the leftist president to quit and call early elections.

Chavez, an outspoken populist who was elected in 1998 and survived a coup in April, seems determined to hang on.

In an angry speech Friday, he said the government had fired 1,000 striking employees of the state oil giant PDVSA.

The shutdown has cut off millions of dollars of oil income and caused shortages of gasoline and some basic foodstuffs.

Chavez, who has sent troops to take over strike-bound oil installations, also threatened to seize if necessary privately owned food warehouses, accusing business opponents of deliberately hoarding supplies of maize and rice.

"The government is ready to tighten its grip wherever we have to," he bellowed in a speech in rural Cojedes state.

Fitch Ratings lowered Venezuela's credit standing by two notches on Friday, downgrading its sovereign debt rating deeper into "junk bond" territory. It also slashed the ratings of strike-hit PDVSA and some Venezuelan banks.

The blast at the Algerian residence caused damage but no injuries. It followed bomb threats Thursday against the German, Canadian, Australian, Polish and Russian embassies.

DIPLOMATIC MOVES

No one claimed responsibility for the attack. But Algeria and other members of the Organization of Petroleum Exporting Countries (OPEC) have offered to help Venezuela counter the effects of the strike. Algeria has sent oil technicians.

Chavez's government blamed the blast on hard-line "terrorist" political opponents supporting the shutdown. "This is the coup-mongering face of the Venezuelan opposition," Foreign Minister Roy Chaderton told Reuters.

In recent months, there have been grenade attacks against the offices of anti-Chavez union and business groups and media organizations. The opposition has blamed the government.

Government officials said security at foreign embassies would be increased. The grenade attack and threats may galvanize international efforts to resolve the crisis, which has disrupted Venezuelan oil shipments to clients as different as the United States and communist-ruled Cuba.

The United States and other members of the Organization of American States are studying the idea of creating a "Friends of Venezuela" group of nations to support current OAS efforts to broker a negotiated, electoral solution to Venezuela's conflict. Brazil has also been working on such an initiative.

"We remain deeply concerned about the deteriorating situation in Venezuela," White House spokesman Ari Fleischer told reporters in Washington.

The United States normally receives more than 13 percent of its crude oil imports from Venezuela.

Chavez said he had spoken by phone Wednesday with United Nations Secretary General Kofi Annan. "I told him ... here we are, men and women of democracy, fighting against a bunch of terrorists, coup mongers and fascists," Chavez said.

The president says his opponents are trying to topple him through the strike. His foes accuse him of ruling like a dictator and trying to implant Cuban-style communism.

Chavez also accused a billionaire Venezuelan media magnate based in Miami, Gustavo Cisneros, of playing a leading role in the opposition campaign to force him from power.

In a statement to government and opposition negotiators taking part in peace talks brokered by the OAS, Venezuela's Catholic bishops urged all sides to seek a peaceful solution to the crisis and to avoid "the abyss of violence."

Two people were killed in clashes a week ago involving anti- and pro-government demonstrators and troops and police.

europe.cnn.com Overnight: Grenade thrown at Algerian ambassador's home Friday, January 10, 2003 Posted: 1751 GMT

CARACAS, Venezuela (AP) -- Opponents of President Hugo Chavez blamed the embattled leader for attacks on opposition-led marches but vowed to take to the streets again Friday.

"It's the leader of the country who is provoking this violence," said Carlos Ortega, president of the Confederation of Venezuelan Workers, the nation's largest trade union.

Bank workers on strike for a second day were marching in Caracas on Friday. Street protests were planned in 11 other cities. The demonstrations are part of a nationwide strike that shut thousands of businesses and brought Venezuela's vital oil industry -- a top U.S. supplier and once the world's fifth-largest exporter -- to a virtual halt.

The Central Bank suspended dollar auctions for a second day Friday after the bolivar currency dropped to a record low of 1,593 to the dollar Thursday -- 5 percent weaker than Wednesday and down 12 percent since the start of the year.

Analysts speculated Chavez's government may have to devalue the bolivar to balance its budget. Most government income is in dollars and a weaker bolivar would increase its domestic spending power.

Unknown assailants tossed a grenade at the residence of Algerian Ambassador Momhammed Khelladi on Thursday night, embassy official Abdela Asis Yafri confirmed Friday. No one was injured and there were no arrests.

The explosion damaged walls of the entrance and two cars. Algeria has offered to send technicians to help jump-start Venezuela's oil industry.

Chavistas attack, prevent opposition rallies

On Thursday, government supporters attacked anti-Chavez marches in Caracas and outside oil facilities around the country, the latest incidents of political violence in this crisis-stricken South American country of 24 million.

A Chavez supporter joins in a Thursday rally outside a gasoline distribution center in Guatire.

"Chavistas," as the president's backers are called, attacked a rally outside a refinery in Cardon, 270 miles (435 kilometers) east of Caracas, wounding a 40-year-old worker and a 28-year-old demonstrator, said Luis Arends, a civil defense worker.

In Caracas, gunfire erupted at an opposition rally. No one was hurt, and the rally resumed. There were no arrests.

Chavez supporters armed with machetes and sticks also prevented a demonstration at an oil facility in central Carabobo state, Globovision television reported. A minor clash occurred at a plant in Barinas state.

Chavez opponents claim the president's fiery rhetoric incites violent reactions from his most radical backers.

Chavez, a leftist former paratroop commander who was elected in 1998 and re-elected two years later, blames the opposition-aligned news media, which he accuses of campaigning for his overthrow.

In January 2002, four supporters of Chavez' ruling party were slain in western Zulia state. Nineteen died last year on April 11, when rival marches clashed in downtown Caracas. The bloodshed spurred a coup and Chavez' brief ouster. Loyalists in the military returned him to power on April 14.

Three more citizens were killed, presumably by a lone gunman, at an opposition rallying point on December 6 and two government supporters died of gunshot wounds at a street march last Friday.

Most bank workers support strike, stay home

Spokesmen at three of Venezuela's largest banks -- Banco de Venezuela, Banco Provincial and Banesco -- said 80 percent of the country's nearly 60,000 bank employees stayed home Thursday.

The bank strike forced many supermarkets to close because shoppers were unable to pay with credit cards or debit cards, said Nelson Da Gama, president of the National Association of Supermarkets.

A nonbinding referendum on Chavez's rule is scheduled for February 2. Chavez insists the constitution only requires him to respect a possible recall referendum in August, the midpoint of his six-year term.

Strike organizers -- including leaders of the nation's largest trade union, its business chamber and the state-run oil company -- claim their protest is as strong as ever. Many factories, industrial parks and supermarkets remained closed.

But there were signs many are tiring of the strike. There was more traffic on streets and sidewalks and in shops, restaurants and markets.

Efforts by Chavez to jump-start operations at Petroleos de Venezuela S.A., the state oil company, have been partially successful.

Crude output is estimated at about 400,000 barrels a day, compared with the pre-strike level of 3 million barrels. Exports, normally 2.5 million barrels a day, are at 500,000 barrels a day.

Energy Minister Rafael Ramirez claimed the company will produce 1.5 million barrels a day by next week and will reach full capacity next month. Dissident oil workers doubt production can reach those levels so soon.

www.abc.net.au Posted: Sat, 11 Jan 2003 8:24 AEDT

Venezuela to boost diplomatic security after grenade attack The Venezuelan Government is promising to increase security for diplomats after a grenade attack on the Algerian embassy and bomb threats against other diplomatic posts, including Australia. Caracas is becoming an increasingly dangerous place as Venezuela slides towards civil war on the back of a six-week-old general strike.

Overnight, the Government of President Hugo Chavez promised to increased security after a grenade exploded in the grounds of the Algerian Embassy.

Algeria is one of the nations that is sending workers to try and break the strike which has crippled oil production.

The Australian Embassy was forced to close temporarily this week after it received a bomb threat.

Three other diplomatic posts were also threatened.

Meanwhile, the Washington Post has reported that the United States will unveil a new plan to try and resolve the dispute in the next week.

The strike has cut oil supplies to the US and raised world crude oil prices.

www.abc.net.au Posted: Sat, 11 Jan 2003 8:24 AEDT

Venezuela to boost diplomatic security after grenade attack The Venezuelan Government is promising to increase security for diplomats after a grenade attack on the Algerian embassy and bomb threats against other diplomatic posts, including Australia. Caracas is becoming an increasingly dangerous place as Venezuela slides towards civil war on the back of a six-week-old general strike.

Overnight, the Government of President Hugo Chavez promised to increased security after a grenade exploded in the grounds of the Algerian Embassy.

Algeria is one of the nations that is sending workers to try and break the strike which has crippled oil production.

The Australian Embassy was forced to close temporarily this week after it received a bomb threat.

Three other diplomatic posts were also threatened.

Meanwhile, the Washington Post has reported that the United States will unveil a new plan to try and resolve the dispute in the next week.

The strike has cut oil supplies to the US and raised world crude oil prices.

www.tuscaloosanews.com By ALEXANDRA OLSON Associated Press Writer January 10, 2003

Six weeks into an opposition strike, Venezuela's economy is in shambles. Oil exports are down to a trickle. Gasoline lines are long. Venezuela is losing $70 million a day.

And Hugo Chavez is still president, confounding a coalition of labor and business leaders who declared a general strike Dec. 2 to demand a nonbinding referendum on his rule. Many believed economic and political pressure would force him to agree to a vote - or even resign - by Christmas.

But Chavez has the backing of Venezuela's military - armed forces purged of dissidents after a brief April coup. General after general has declared loyalty to the constitution and to a democratically elected government.

Chavez also is stubborn in a crisis where other leaders might feel threatened. After oil production was paralyzed, eliminating the source of half of government revenue and 80 percent of export earnings, he fired 1,000 people from the state-owned oil monopoly and vowed to tighten government control over the company.

The president's opponents are equally stubborn, staging dozens of street marches, calling for a tax boycott and staging a two-day bank strike this week. While thousands of businesses have opened, giant national and multinational firms are closed.

"Nobody, including me, thought this could last six weeks," said Luis Vicente Leon, director of Venezuela's most prestigious polling firm, Datanalisis. "Chavez can win. That is a possibility."

A growing civic movement demanding accountable democracy and an end to violence is part of what keeps the strike alive. The movement cites Article 350 of Venezuela's constitution, which permits citizens not to recognize a government that infringes on human and democratic rights. Ironically, analysts say Chavez included the article to justify his own 1992 coup attempt.

Holding on to power will cost Chavez. The government is considering cutting the 2003 budget by at least 10 percent. Unemployment is at 17 percent and inflation is at 30 percent.

"At this point, it's impossible to avoid an economic crisis of huge dimensions," Leon said. "Chavez has simply decided to deal with that crisis. He seems to be willing to see the economy collapse to stay in power."

Chavez won presidential elections in 1998 and was overwhelmingly re-elected to a six-year term in 2000 on an anti-poverty, anti-corruption platform.

Under Chavez, Venezuela's economy has plunged into deep recession. In the meantime, he has occasionally run roughshod over democratic institutions, including Congress and the Supreme Court.

On the streets, his so-called "Bolivarian circles" - neighborhood groups that are sometimes armed - protect the presidential palace and patrol oil fields abandoned by striking workers.

In November, organizers had to fight their way through circle members to deliver 2 million signatures demanding the referendum.

The National Elections Council agreed to hold the vote Feb. 2. Chavez says he'll ignore the results and that his opponents can wait for a possible recall referendum halfway into his term, or next August, as permitted by the constitution.

Opponents fear he'll figure out a way to postpone that vote.

Nowhere has the battle been fiercer than in the oil industry.

Many oil executives left their offices intact, thinking they'd be back in a week, maybe two. Chavez ordered troops to lock them out and says a long-term restructuring plan will restore full production.

Strike leaders insist the plan is farfetched. It's not easy to replace 30,000 trained personnel, they note.

"Who is going to assign budgets? Who is going to coordinate finances? Who is going to control foreign operations?" demanded Edgar Paredes, who was fired as president of the company's petrochemicals unit. "Without clear and precise answers to these and other relevant questions, the proposal is illusory and irresponsible."

Chavez is forging ahead with help from the military.

Troops are guarding oil installations and service stations. They seized striking oil tankers and commandeered gasoline trucks. Army Commander Gen. Julio Garcia Montoya delivered a blistering condemnation of the strike and professed his loyalty to the government.

A recent opposition march on military headquarters in Caracas ended in chaos after military police fired tear gas and rubber bullets at protesters who tried to break through security lines. Chavez supporters attacked the march with bottles, rocks and fireworks. Gunfire rang out, and two Chavez sympathizers died. Amid the commotion, opposition lawmaker Julio Borges pleaded with a soldier.

"The country can't go through this everyday. Think about it," Borges said, tapping his head with his finger.

The soldier grinned and replied, "Right, let's ban marches."