Venezuela recalls Colombia envoy over hostage spat

CARACAS (Reuters) - Venezuela's President Hugo Chavez recalled his ambassador from Colombia on Tuesday, escalating a dispute over Bogota's suspension of the leftist leader's role in talks to free hostages held by guerrillas.

The recall heightens tensions between the neighbors after Chavez and President Alvaro Uribe exchanged barbs over Bogota's abrupt end to Chavez's efforts to free captives, including three Americans and French-Colombian politician Ingrid Betancourt.

"The government of the Bolivarian Republic of Venezuela, due to recent events and in order to carry out an exhaustive evaluation of bilateral relations, has recalled its ambassador from Bogota," the foreign ministry said in a statement.

But Colombia said it would keep its envoy in Caracas despite Venezuela's decision.

"The Colombian government is not going to recall its ambassador in Caracas for consultations," Foreign Minister Fernando Araujo told reporters in Bogota. "We are going to keep monitoring this situation to see what happens."

Chavez said during the weekend that he had "frozen" relations with Colombia and accused Uribe of lying in the dispute, which the anti-U.S. leader said could affect the $6 billion in annual trade between the two Andean countries.

Uribe, a close Washington ally, responded by accusing Chavez of favoring the Revolutionary Armed Forces of Colombia, or FARC, which is still waging Latin America's longest-running rebel insurgency.

Colombia invited Chavez in August to try to broker an agreement with the rebels over their hostages, some of whom have been held for nearly 10 years in secret jungle camps. His left-wing credentials raised hopes he could reach a deal.

But Uribe appeared to become frustrated with Chavez's handling of the delicate talks. Colombia abruptly ended the efforts, saying Chavez broke with protocol by speaking to the head of Colombia's army without permission.

The diplomatic quarrel is the worst since Chavez recalled his then-ambassador to Colombia in 2005 after bounty hunters snatched a Colombian rebel commander from a Caracas street and whisked him across the border to be arrested.

At the time, Chavez charged Colombia with violating Venezuelan sovereignty and briefly suspended business accords, cutting bilateral trade by 15 percent.

For the most part, the two leaders have managed to keep a pragmatic relationship despite their ideological differences as they rely on each other in trade and energy matters and share a 1,367 mile (2,200-km) frontier.

(Reporting by Brian Ellsworth in Caracas; writing by Patrick Markey in Bogota, editing by Vicki Allen)