CARACAS - Venezuela's President Hugo Chavez used a visit by Iranian President Mahmoud Ahmadinejad on Wednesday to brand Israel as a murderous agent of Washington.

Chavez and Ahmadinejad, on the last leg of a tour of three left-leaning South American nations, hugged, held hands, and praised each other as fellow revolutionaries.

The Venezuelan singled out a comment by Israeli President Shimon Peres, during a visit this month to South America, that his and Ahmadinejad's days in power may be numbered.

We know what the state of Israel stands for -- a murderous arm of the Yankee empire, Chavez told joint news conference. What the president of Israel said, we take as a threat.

Chavez broke relations with Israel this year. He won praise in the Muslim world after branding an Israeli military offensive in the Gaza Strip as genocide.

His fierce speeches against Israel are taken by some supporters as a green light for anti-Semitism and walls in Caracas are often daubed with anti-Jewish slogans.

Ahmadinejad denies the Holocaust and has called for Israel to be wiped off the map.

OPEC members Venezuela and Iran have grown much closer in recent years. Chavez supports Ahmadinejad's controversial nuclear program, while Iran is helping Venezuela map uranium deposits.

The leaders were to sign a raft of business and industrial agreements during a visit that has drawn criticism from Venezuela's opposition which calls them both dictators.

Ahmadinejad clinched a second term after a disputed June election brought the worst unrest in Iran since the 1979 Islamic revolution and a heavy-handed clampdown on opponents.

His trips to left-leaning Brazil, Bolivia and Venezuela this week have helped cement ties with countries that back Iran's right to develop atomic power for peaceful purposes.

Iran is under pressure to accept a U.N. plan aimed at checking nuclear ambitions which it says are peaceful but the West fears could be intended to create atomic weapons.

A leading Chavez critic and newspaper director, Teodoro Petkoff, mocked Ahmadinejad's visit, saying past cooperation deals had led to little of substance, not even the planned production of bicycles.

Chavez loves creating controversy every time he goes or Ahmadinejad comes, but the hard truth is that the Iran-Venezuela relationship is a fantasy of lavish projects which in reality is pure pure blah-blah, he wrote.

Karen Hooper, Latin America analyst for Stratfor consultancy, agreed that the worst fears in Washington about Venezuela and Iran's ties may be overblown.

There is little danger of Venezuela being able to help Iran proliferate, she said.

Although Iran is short on uranium and Venezuela might have some, even if Venezuela were to deliver sufficient quantities, the real problem for Iran is the enrichment process, which requires technology that Venezuela could not possibly wield.

(Writing by Andrew Cawthorne; Editing by Alan Elsner and Walker Simon)

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