Venezuela's Chavez Defies Strike

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.