Chavez says Venezuela will develop nuclear power

CARACAS (Reuters) - President Hugo Chavez said on Sunday Venezuela will develop a nuclear reactor for peaceful purposes, in another challenge to Washington just days after Russia offered nuclear assistance to the socialist Latin American leader.

"In Venezuela we are interested in development of nuclear energy, of course for peaceful purposes, for medical purposes, for purposes of electricity generation," Chavez said at a political rally.

"Brazil has various nuclear reactors, so does Argentina. We will have ours."

Chavez noted that Venezuela, which is a member of the oil-producing cartel OPEC, developed a nuclear reactor decades ago but abandoned it under pressure from the United States.

He said Russian Prime Minister Vladimir Putin had offered help with a reactor, adding that "we already have a commission working on this issue."

Chavez did not offer details or say when a reactor could be ready, but the news could further strain relations with Washington, which views Chavez as autocratic and erratic.

He has repeatedly challenged Washington, notably by defending Iran's nuclear activities despite strong condemnation by the United States and Europe.

This month Chavez expelled the U.S. ambassador to Venezuela and repeated his frequent threats to halt oil sales that make up around 10 percent of U.S. oil imports.

Venezuela has boosted cooperation with Moscow since Russia came under strong U.S. condemnation for fighting a war against Georgia last month, strengthening ties between two of the United States' strongest critics.

Russia and Venezuela have also signed 12 arms contracts worth a total of $4.4 billion in the last two years, according to a Kremlin source.

(Reporting by Brian Ellsworth and Ana Isabel Martinez; editing by Chris Wilson)