Humbled Chavez to meet with high-flying Uribe

BOGOTA (Reuters) - It will be a conciliatory Hugo Chavez who walks into Friday's meeting with Colombian President Alvaro Uribe, as the Venezuelan leader finds himself humbled by problems at home and last week's rescue of Ingrid Betancourt.

After Colombian forces freed the former presidential candidate and 14 other hostages held for years by Marxist guerrillas who Chavez has supported, U.S.-backed Uribe is in a strong position for the summit aimed at repairing ties.

The meeting at an oil refinery in Venezuela is meant to reactivate the bilateral economic agenda, including pending energy projects, after months of recrimination between the neighboring countries that share $6 billion annual trade.

But the distrust will likely remain between ideologically opposite leaders. Uribe has threatened to take Chavez to court for supporting the rebels and the leftist Venezuelan has called his counterpart a liar and U.S. lackey.

The United States sees the usually outspoken Chavez as a destabilizing influence in South America. He has scared off investment by nationalizing businesses, while the strait-laced but equally strong-willed Uribe is a Wall Street favorite.

The need for cooperation on trade, immigration, cross-border guerrilla violence and drug-trafficking gives both men reason to find ways to get along.

Uribe's popularity shot to over 90 percent in a poll taken after last week's rescue, in which intelligence officers duped the rebels into releasing 15 of their most prized captives.

Chavez still has strong domestic support but even his followers are getting tired of high crime, runaway inflation and food shortages in the major oil-exporting nation.

The two were once known as the "Odd Couple" of South American politics, often seen hugging and chatting at summits. Relations went sour late last year when Uribe fired Chavez from his role mediating the release of rebel-held hostages.

Chavez stole the international spotlight anyway by negotiating the release of six captives in early 2008. But Chavez later found himself on the defensive, having to deny giving the rebels money after Colombia said it found such evidence on a guerrilla leader's computer.

The balance tilted further in Uribe's favor last week with Betancourt's rescue, which highlighted the success of his hard-line military policy compared with Chavez's enthusiasm for talks with rebels as peace partners.

"Chavez faces growing public dissatisfaction with such basic issues as food scarcity," said Cynthia Arnson of the Woodrow Wilson Center's Latin American Program in Washington.

"The smashing success of the hostage rescue stands in stark contrast with the less-than-expected results of Chavez's mediation," she said. "So Uribe goes into this meeting riding high while Chavez has been chastened on a number of fronts."

BACK TO THE FUTURE

The Venezuelan leader, who had previously called for more recognition for the guerrillas, last month urged them to unconditionally release their hostages and end the war.

"The meeting on Friday should bring relations to at least where they were a year ago, before Uribe named Chavez as a hostage mediator," said Adam Isacson of the Center for International Policy in Washington.

The frontier was especially tense in March after Colombian troops killed a top rebel chief in a camp inside Ecuador. Venezuela reinforced troops along the border and Colombia said laptops found at the camp show Chavez's backing of the rebels.

Uribe is leaving open the possibility of running again in 2010, which would require a constitutional amendment allowing him a third presidential term.

Chavez lost a referendum in December that asked voters if they wanted to allow him to seek re-election as many times as he wants, but he has vowed to try again.

So Friday's meeting could be used to lay a foundation for the two to work with each other for some time to come.

"Cordial but mutually suspicious is how I would describe where relations will be after this (meeting)," Isacson said.

(Editing by Saul Hudson and Anthony Boadle)