Colombia's Santos, Venezuela's Chavez to meet Tuesday

Venezuela's President Hugo Chavez speaks during his weekly broadcast ''Alo Presidente'' at Miraflores Palace in Caracas August 8, 2010.

BOGOTA/CARACAS (Reuters) - Colombia's new President Juan Manuel Santos will meet his Venezuelan counterpart Hugo Chavez on Tuesday to try and restore relations that broke over accusations Caracas is sheltering leftist guerrillas.

Though ideologically opposed, socialist firebrand Chavez and U.S. ally Santos want a new start in relations for the sake of peace in the volatile Andean region and the restoration of their annual $7 billion bilateral trade.

"Today I am going to sleep happy!" Chavez said in Caracas after the planned meeting was announced following talks between the two nations' foreign ministers in Bogota.

Santos took over on Saturday from outgoing Colombian leader Alvaro Uribe, whose accusations caused Chavez to break ties last month in the latest swing of the two Andean neighbors' on-again, off-again relationship.

"I hope that from this meeting we can reach conclusions that enable us to normalize relations," Santos said.

Despite aggressive talk from both Caracas and Bogota in recent weeks, few thought the spat would spiral into war and markets shrugged off the dispute as largely the same rhetoric that has colored messy relations between the Andean neighbors for more than a decade.

The concrete issue at root -- is Venezuela supporting Colombian guerrillas and allowing them to hide on its soil? -- remains unresolved as are concerns over Venezuelan debt to Colombian companies and the volatile frontier.

It is unclear how Santos and Chavez, who have criticized each other in the past, will get round the charges of Venezuela's complicity with rebels on Tuesday beyond ignoring it, given that their governments flatly contradict each other.

CHAVEZ DEMANDS "RESPECT"

Chavez would gain from improved relations and trade with Colombia before September legislative elections and as his OPEC nation struggles to pull out of recession.

But the Venezuelan socialist warned the reconciliation effort was fragile.

"Let's be clear. If Venezuela is respected, there will be progress. If there's lack of respect to Venezuela, nothing new or good will be possible," he wrote in a weekly column.

Seeking to demonstrate his peace credentials, Chavez called on Colombia's rebels to give up their decades-old armed struggle and seek a negotiated solution.

"The guerrillas should come out in favor of peace. They should release all their hostages," he said on his regular Sunday TV program. "They have no future by staying armed," added Chavez, repeating similar past pleas.

"Furthermore they have become an excuse for the (U.S.) empire to intervene in Colombia and threaten Venezuela from there," Chavez said, a reference to the U.S. military presence in Colombia which so irks him.

Venezuelan Foreign Minister Nicolas Maduro announced the Tuesday meeting after meeting his Colombian counterpart Maria Angela Holguin on Sunday.

"We have taken the first step with a frank and direct dialogue with the aim of both countries reestablishing relations," Holguin said.

Before meeting Maduro, Holguin also held talks with Ecuadorean Foreign Minister Ricardo Patino to try to smooth over another of Colombia's messy confrontations.

Ecuador, whose left-wing government is an ally of Chavez, and Colombia are also hoping to restore full relations after a controversial 2008 bombing raid against Colombian rebels across the Ecuadorean border.

The Colombian and Ecuadorean ministers discussed reestablishing relations and cooperation on issues such as frontier development and energy. "For us, our relations with Ecuador are very important and we want to keep on this path toward normalization," Holguin said.

(Additional reporting by Luis Jaime Acosta in Bogota; editing by Chris Wilson)