President Hugo Chavez’s supporters won all 167 seats in Congress after 5 opposition parties boycotted 4 December congressional elections. EU observers said poll fair and transparent, despite low voter turnout (25%) due to widespread distrust in electoral system.

Opposition parties withdrew ahead of 4 December legislative elections, accused electoral body of favouring pro-government candidates. President Chavez called Mexican president “puppy” of U.S. imperialism sparking diplomatic row. Government-controlled Citgo Petroleum Corp. announced plan to sell discounted heating oil to low-income areas of U.S.

President   Chavez   repeated   claims   had intelligence showing U.S. plans to invade Venezuela for control of oil; accused evangelist group of spying for U.S. Ecuadorian intelligence alleged leftist rebels from 7 Latin American countries received guerrilla training in Venezuela in 2005 from backers of Chavez.

President Hugo Chavez vowed to improve tense relations with Washington; prior to announcement, Chavez criticised President Bush at UN summit for Iraq war, applauded by General Assembly, and later claimed had evidence of U.S. plans to invade Venezuela.

Tense relations with U.S. continued as Washington revoked visas of 6 Venezuelan officials; Caracas retaliated by withdrawing diplomatic immunity of U.S. Drug Enforcement Administration officials 12 August. President Chavez accused DEA of spying, suspended cooperation, opened investigation into its activities and threatened to seek extradition of far right religious maverick Pat Robertson, who had publicly called for his assassination on radio show.

War of words with U.S. continued with launch of Telesur, Venezuela-led Latin America-wide media venture. U.S. labelled station “anti-American, anti-freedom”; President Chavez threatened retaliation to U.S. “electronic warfare”. Ties also strained between Caracas and Catholic Church after retired Cardinal branded Chavez dictator, urged people to reject administration. Opposition protests ahead of 7 August municipal elections called for free and fair polls.

Strained relations with U.S. persisted: formal request to extradite Cuban terror suspect and Venezuelan citizen Luis Posada Carriles from U.S. made to U.S. government 16 June.

Relations with U.S. continued to sour: Defence Minister Jorge Garcia Carneiro signed arms agreement with Russia 17 May despite U.S. opposition; government claimed interest in nuclear energy and possible talks with Iran to study atomic projects 22 May; President Hugo Chavez threatened to cut diplomatic ties over U.S. failure to extradite Cuban militant Luis Posada Carriles - terror suspect held in U.S.

Troops captured 5 Colombian right-wing AUC paramilitaries on Venezuelan soil in latest border incident 18 April. President Hugo Chavez cut military ties with U.S. after accusing American instructors of attempting to foment unrest. Chavez continued to bolster his military forces with new 20,000 strong military reserve to help deter “imperialist aggression”.

Tensions with Colombia resurfaced after Venezuelan forces crossed border in search of gasoline smugglers 23 March. U.S. Defense Sec. Donald Rumsfeld voiced U.S. concerns over Venezuelan arms acquisitions. Defence and energy deals signed with Spain 31 March.