Crisis Stirs Diplomatic Waves

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

CARACAS, Venezuela (Reuters) - A grenade attack and bomb threats against foreign embassies in Caracas pulled the international community deeper into Venezuela's crisis on Friday as a 40-day-old opposition strike dragged down the country's oil-reliant economy.

A grenade exploded late Thursday at the residence of the ambassador from Algeria, which has offered to assist President Hugo Chavez in his fight to beat the strike.

The shutdown, now in its sixth week, has crippled oil output and exports in the world's No 5 petroleum exporter, jolting world markets and pushing up oil prices.

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 Chavez to resign and call early elections.

Chavez refuses and has vowed to beat the strike, which has cut off millions of dollars of oil income.

Fitch Ratings lowered Venezuela's credit standing by two notches on Friday, downgrading its sovereign debt rating deeper into "junk bond" territory, to 'CCC-plus' from 'B'.

The blast at the Algerian ambassador's residence, which caused damage but no injuries, followed bomb threats Thursday against the German, Canadian and Australian embassies in Caracas.

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.

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

EMBASSY SECURITY TIGHTENED

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.

Chaderton welcomed the idea of foreign support. "All this contributes to strengthening our democracy and the recognition of Venezuela's legitimate institutions," he said.

Chavez was elected in 1998 and survived a brief coup by military officers in April. He 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.

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

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

Some foreign embassies, including those of the United States and Britain, have evacuated nonessential personnel and warned their nationals not to travel to Venezuela unless absolutely necessary.

Rangel said oil output and refining was recovering. But oil industry sources said government efforts to raise oil production have met with little success so far. They put production this week at about 450,000 barrels per day (bpd), compared with 3.1 bpd in November before the strike.