UPDATE 2-U.S. holds back recognition for Venezuela's Maduro
* Washington urges Caracas to allow peaceful protest
* Anti-U.S. card will be tempting for Maduro to play
* Venezuela's economy could spur normalization (Adds background, analysts' comments)
By Paul Eckert
WASHINGTON, April 17 (Reuters) - The United States held back recognition of leftist President-elect Nicolas Maduro and called on the Venezuelan government on Wednesday to respect the right of free assembly after violence at opposition protests over a disputed election.
The razor-thin weekend election victory by Maduro, the chosen successor of the late socialist President Hugo Chavez, has been rejected by his rival, Henrique Capriles, who is alleging voting irregularities and calling for an audit of the ballots. Seven people have been killed in opposition-led protests.
Secretary of State John Kerry said the United States had not decided whether to recognize Maduro as president.
"That evaluation has to be made and I haven't made it," Kerry told the House of Representatives Foreign Affairs Committee. "We think there ought to be a recount."
"Obviously, if there are huge irregularities, we are going to have serious questions about the viability of that government," he added.
White House spokesman Jay Carney urged all sides to refrain from violence and other actions that could raise tensions in the South American oil-producing nation.
"We call on the Venezuelan government to respect the rights of Venezuelan citizens to peaceful assembly and free speech," Carney said in a statement.
He said Washington "notes the acceptance by both candidates for an audit of the ballots and supports calls for a credible and transparent process to reassure the Venezuelan people regarding the results."
Maduro initially accepted the proposal for a full audit of the close election, but backtracked and hardened his stance against it.
REGULARIZATION OR MORE BOGEYMAN?
During Chavez's 14-year tenure, Venezuela was a strong opponent of the U.S. government in Latin America and the former soldier frequently invoked "imperialist" plots against him.
Analysts watching Venezuela's tumultuous move into the post-Chavez era six weeks after his death say Washington should keep a low profile and work with regional partners, European governments and the Organization of American States.
Maduro, who accused the United States of giving Chavez the cancer that killed him, echoed his mentor's anti-U.S. rhetoric on the campaign trail and has accused the Obama administration of orchestrating and funding the post-election protests.
But in a hint of change, Bill Richardson, the former governor of New Mexico, who was in Caracas with the OAS, told The New York Times Maduro had told him he wanted to "regularize the relationship."
Earlier this week, the White House said Washington wanted to have dialogue with Caracas on issues including counternarcotics, counterterrorism and the commercial relations.
Cooperation on these areas suffered during the long tenure of Chavez, who taunted the United States at the United Nations and forged close ties with U.S. foes Cuba, Iran and Syria and with leftist guerrillas in neighboring Colombia.
Ted Piccone, deputy director of foreign policy at the Brookings Institution, said inflation, scarcity of food and other basic goods, corruption and flagging investment could drive Maduro eventually to turn to the United States.
"He needs to turn around the really bad economic situation there and can use some help from the U.S. on that," said Piccone.
"People are complaining much more about the bread-and-butter issues than they are about foreign relations," he said.
Carl Meacham, head of the Americas Program at the Center for Strategic and International Studies, however, warned that Maduro's thin mandate after a close vote and post-election turmoil could prompt him to blame a U.S. bogeyman for Venezuelans' troubles.
"Maduro's going to be struggling to keep his own house in order, and with the more radical factions in Chavismo, he's going to have to increase the rhetoric and demonstrate that he's more Chavez than Chavez himself," said Meacham.
"Having a rapprochement with the United States is not something that's on the front burner for him," he added. (Additional reporting by Patricia Zengerle and Steve Holland; Editing by Alistair Bell; Editing by Mohammad Zargham)
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