Chavez rallies backers before Venezuela referendum

CARACAS (Reuters) - Venezuelan President Hugo Chavez on Friday rallied supporters before a weekend referendum on overhauling the oil-producing country's constitution that would expand his powers.

Polls show a technical tie between the "Yes" and "No" votes on the constitutional overhaul that would let Chavez run for re-election indefinitely.

The tight polls have left many Venezuelans uneasy about the outcome of the referendum and whether Chavez and his opponents will accept the results.

The vote is the first that Chavez faces without a solid majority in the polls, and a defeat could slow the meteoric rise of the anti-U.S. leader who supports Washington's foes, including Cuba and Iran.

"I'm here to support President Chavez's reform -- fatherland, socialism or death!," shouted Jose Luis Perez, who invoked the campaign slogan as he marched in a sea of red-clad supporters down a main avenue of in Caracas.

Chavez rode atop a caravan in a crowd of tens of thousands of supporters, dressed in his signature red emblazoned with the word "Yes" and banging his fist against his palm.

The constitutional changes would allow Chavez to run for re-election indefinitely and give him direct control over foreign currency reserves, swollen by oil sales.

It would also reduce Venezuela's official work day to six hours and expand social security benefits for informal workers like street vendors.

Chavez has struggled to sell the changes to many of his own supporters despite strong backing from the nation's poor majority for social programs financed by the OPEC nation's oil industry, which provides some 12 percent of U.S. oil imports.

A former army officer, Chavez has sought to turn the referendum into a plebiscite on his rule, while drawing attention from the reform proposals through diplomatic spats with Spain, Colombia, and the United States.

His get-out-the-vote machinery could tip the balance against a fractured opposition that has largely pinned its hopes on an untested movement of anti-Chavez university students.

Caracas-based pollster Hinterlaces released a telephone survey showing the "No" vote leading "Yes" by 13 points, though most other pollsters show the race is still a toss-up.

One recent poll by Consultores 21 showed Chavez stronger than the opposition in isolated rural areas, which are not taking into account in many other polls.

Emerging market investors are nervously awaiting the results, with Venezuelan bond prices slumping over the last month on concerns over possible political turbulence if the vote is close.

Opposition leaders have pledged to stage protests if the Chavez-controlled electoral authority tampers with the vote, while government leaders say the opposition is preparing to cry fraud and launch violent demonstrations if the reform passes.

(Editing by Hugh Bronstein)