Chavez: Spain king makes positive gesture in flap

CARACAS (Reuters) - Venezuelan President Hugo Chavez on Wednesday welcomed a "positive" gesture from Spain's king in a diplomatic dispute threatening investments that erupted last month when the monarch told him in public to "shut up."

The king sent a message congratulating him for Sunday's peaceful constitutional reform referendum, he said, in a sign of a possible rapprochement between Venezuela and the ex-colonial power after Chavez froze relations last month.

Spain's Prince Felipe will personally deliver a message from his father when the two men attend a swearing-in ceremony of a new president in Argentina this weekend.

Chavez has demanded King Juan Carlos apologize.

"I will receive him, I am a gentleman," Chavez said at a news conference. "This is a positive sign."

The king told the leftist leader to "shut up" during a summit in Chile after Chavez -- known for outbursts that have sparked numerous diplomatic disputes -- called former Spanish Prime Minister Jose Maria Aznar a "fascist."

Chavez responded by saying he would review the Venezuelan holdings of Spanish businesses, including banks BBVA and Santander and oil company Repsol, which have an estimated $2.4 billion invested in the OPEC nation.

Seeking to rally supporters in a referendum on whether he could run indefinitely for re-election, Chavez repeated the threats in the run-up to Sunday's vote.

Late in the campaign he also threatened to cut off oil supplies to the United States and withdrew his ambassador to Colombia in a dispute over hostage talks with rebels.

Chavez lost the referendum by 2 percentage points.

(Reporting by Fabian Cambero, Writing by Brian Ellsworth, Editing by Saul Hudson and Cynthia Osterman)