Chavez floats Stone, Penn, Clinton for U.S. envoy

U.S. Director Oliver Stone poses during a photocall promoting his film ''Wall Street: Money Never Sleeps'' in Berlin, October 12, 2010.

CARACAS (Reuters) - Venezuelan President Hugo Chavez sought to end a diplomatic stand-off with the United States on Tuesday by suggesting it name Bill Clinton, actor Sean Penn or director Oliver Stone as its envoy to Caracas.

In the latest flare-up between the ideological foes, Washington withdrew the visa of Venezuela's ambassador last week in retaliation for Chavez's rejection of President Barack Obama's nominated ambassador to Caracas.

U.S. diplomat Larry Palmer had criticized Venezuela's government, saying morale in its military was low and there were clear ties between members of the Chavez administration and leftist rebels in neighboring Colombia.

In a televised speech late on Tuesday, Venezuela's firebrand president said he had come up with a solution.

"I hope they name Oliver Stone. I'll suggest a candidate ... Sean Penn, or (linguist and philosopher Noam) Chomsky. We have a lot of friends there. Bill Clinton!" Chavez said.

Stone visited Caracas in May for the local premiere of his documentary "South of the Border," which profiles Latin America's leftist leaders. He told reporters he admired Chavez and his record since coming to power in 1999.

Penn, who has been involved in humanitarian efforts following Haiti's earthquake, won best actor Oscars for his roles in the Clint Eastwood-directed drama "Mystic River" and as slain gay activist Harvey Milk in the movie "Milk."

Chavez also recounted how he met U.S. Secretary of State Hillary Clinton briefly on the sidelines of Dilma Rousseff's inauguration ceremony on Saturday in Brazil.

"I said to Senora Clinton 'How is your husband?'" he said. "But I made a mistake because I speak very bad English, and I said 'How is your wife?' She laughed, then I said husband."

When Obama took office in January 2009, promising more engagement with foes, there were expectations of a possible rapprochement. Chavez toned down his tirades against the "empire" and shook hands with the new U.S. leader at a summit.

But within months, Chavez said Obama was disillusioning the world by following his predecessor George W. Bush's foreign policies, and the rhetoric from Caracas cranked up again.

Despite the latest diplomatic spat, few expect either Venezuela or the United States to risk jeopardizing trade ties -- principally oil -- crucial to both nation's economies.

(Editing by Todd Eastham)