Rice believes Chavez is "destroying" Venezuela

WASHINGTON (Reuters) - U.S. Secretary of State Condoleezza Rice said on Wednesday she believed Venezuelan President Hugo Chavez was destroying his country economically and politically.

Venezuela's Congress on January 31 granted Chavez powers to rule by decree for 18 months as he tries to force through nationalizations key to his self-styled leftist revolution.

"I believe there is an assault on democracy in Venezuela and I believe that there are significant human rights issues in Venezuela," Rice told lawmakers at a congressional hearing. "I do believe that the president of Venezuela is really, really destroying his own country, economically, politically."

Venezuela is the fourth largest oil exporter to the United States and Washington, which has been at odds with Chavez for years, has criticized his plans to nationalize his country's oil and utility assets.

The Venezuelan leader is known for his fiery anti-U.S. rhetoric and is a close ally of Cuban President Fidel Castro.

Despite her comments Rice said she wanted to avoid getting into "a rhetorical contest" with Chavez. She said the United States has traditionally had good relations with Venezuela and would like to have them in the future.

Venezuela has vowed to strip some of the world's biggest oil companies of controlling stakes in oil projects of the country's Orinoco Belt by May 1.

The pledge, which affects firms such as Chevron, Exxon Mobil, Conoco Phillips, Statoil and BP Plc, forms a vital part of the nationalizations at the heart of his revolution in Venezuela.

The White House said that any U.S. firms affected by nationalizations must be compensated fairly.