Chavez throws down gauntlet to Venezuela opposition

CARACAS (Reuters) - President Hugo Chavez said Venezuela's newly empowered opposition would not be able to block his socialist legislative program and challenged them to go to the voters immediately if they wanted to unseat him.

Having boycotted parliamentary elections in 2005, opposition parties in the recently-united Democratic Unity bloc won 65 seats, or more than a third, of the National Assembly in the South American nation's weekend election, against 98 seats for the ruling Socialist Party.

Given they also obtained half the popular vote, Democratic Unity hailed the result as a triumph and set their sights on defeating Chavez at the next presidential election in 2012.

But the 56-year-old Chavez -- who has been in power since 1999 and remains Venezuela's most popular politician -- ridiculed their celebrations and threw down a gauntlet.

"I challenge them. As they say they are the majority ... call a referendum. Why wait another two years to get rid of Chavez?" he told a news conference late on Monday.

"Come for me! Here I am ... If not, see you in 2012."

Venezuela's constitution would allow a so-called "recall referendum" on the president if the opposition obtained about 3.5 million signatures requesting it. But Chavez comfortably won one in 2004, and the opposition is wary of trying again.

Opposition leader Antonio Ledezma responded to Chavez's challenge by saying he should be focused on other things.

"Get to work! Stop the shanty-towns in the hills around Caracas from falling down," Ledemza, who is also Caracas city mayor, told a news conference.

"Don't invite us to another battle, more confrontation. Invite us to work together against crime, poverty, the electricity shortage, the crisis in hospitals ... This is not a war. We are not going to fix these problems with insults."

The opposition want to exploit their new profile in parliament and increased acceptance among Venezuela's nearly 29 million people to mount a serious challenge in two years.

For that, they need to maintain unity among the more than 30 parties and groups that make up Democratic Unity, and present a program that goes beyond just opposition to Chavez.

"The opposition still lacks real cohesion, a credible message and attractive candidates, so voters were really voting for, or against, Chavez," said Daniel Kerner, an analyst with Eurasia Group, following Sunday's legislative vote.

"Chavez remains powerful and, most importantly, his continuity was not at stake here. Any view that Chavez will lose those elections (in 2012) will be premature."

"INFINITELY DEMOCRATIC"

Nevertheless, there can be no doubt Sunday's vote was something of a watershed for an opposition movement used to in-fighting and being outwitted by Chavez.

Investors welcomed the peaceful nature of the election and the opposition's strong showing. Venezuela's benchmark 2027 bond rose 2.5 percent on Monday and another 0.6 percent to a bid price of 72.75 by early afternoon on Tuesday.

Analysts said strong oil prices and greater appetite for global risk were also behind that.

Chavez insisted the opposition, which will take their new assembly seats in early January, would not block his reforms.

"Ninety-nine percent of laws are passed by simple majority and we won the simple majority ... They won't be able to win a majority unless they raise both hands," he said laughing.

In reality, the ruling Socialist Party fell well shy of the two thirds or 110 seats needed, experts say, to pass major laws like shakeups of education and health or big nationalizations.

But Chavez does have three months before the new lawmakers take office, so the Assembly is a rubber-stamp until then. He wants further reforms to grass-roots political structures and may seek more nationalizations in the bank and food sectors.

The Socialists are one vote short of the 99 seats, or three fifths, needed to give Chavez decree powers that would enable him to bypass parliament, so there will be plenty of political speculation over whether they could lure one legislator over.

In a four-hour news conference at his presidential palace, Chavez vowed to "speed up" programs, without being specific.

The baseball-mad former soldier rose from poor rural roots and first tried to take power in a 1992 coup before winning at a vote in 1998. Since then, he has become a leading U.S. critic and one of the world's most recognizable politicians.

Chavez has an authoritarian style and is tough with critics -- but bristles at accusations of being a dictator.

"If you have eyes, look. If you have ears, listen," he said. "This is an infinitely democratic project."

(Additional reporting by Eyanir Chinea; Editing by Anthony Boadle)