Venezuela restores Colombia diplomatic ties

CARACAS (Reuters) - Venezuela will immediately restore diplomatic relations with Colombia, the government said on Sunday, after this week's resolution of a regional dispute that had raised fears of war.

A Colombian raid on a Marxist guerrilla camp in Ecuador last week sparked the region's worst diplomatic crisis in years, with Venezuela and Ecuador sending troops to their borders with Colombia, their U.S.-backed neighbor.

Leftist Venezuelan President Hugo Chavez cut ties with Colombia, but following a handshake at a regional summit on Friday, promised to quickly withdraw the 10 army battalions he had sent to the border and normalize relations.

Colombia's March 1 raid on a Revolutionary Armed Forces of Colombia, or FARC, rebel camp killed over 20 fighters including the rebel's second in command, Raul Reyes.

The attack came just days after the FARC released four lawmakers they had held hostage for years in a deal negotiated by Chavez who has good relations with the guerrillas.

The foreign ministry said on Sunday that Venezuela would send its diplomats back to Bogota immediately and was ready to receive Colombian diplomats "as soon as possible."

The Venezuelan government "decided to reestablish the normal functioning of its diplomatic relations with the government of the Republic of Colombia," the ministry said in a statement.

Despite the fact that all sides have de-escalated the conflict in recent days, relations remain fragile between Colombia's pro-Washington government and left-wing nationalists in Venezuela Ecuador and Bolivia.

Ecuador has been more reluctant to patch things up with Colombia, demanding a commitment that the Colombians never again launch a raid across the borders.

"We're the victims. Uribe must guarantee that neighbors don't find themselves involved in this," Ecuadorean President Rafael Correa said in an interview published in an Argentine newspaper on Sunday.

The head of the Organization of American States, Jose Miguel Insulza, was in Quito on Sunday and said he wanted to clear up exactly what had happened in the raid. He said he would propose mechanisms to lower regional tensions.

Nicaragua, which briefly cut relations with Bogota in support of Ecuador and has its own border disputes with Colombia, has also agreed to restore its diplomats.

(Additional reporting by Helen Popper in Buenos Aires and Alexandra Valencia in Quito; Writing by Frank Jack Daniel, editing by Alan Elsner)