President of the assembly Luis Miquilena promised a revolution 'via dialogue'

The assembly, which convened for the first time on Tuesday, is almost completely dominated by supporters of Venezuelan President Hugo Chavez. They occupy 123 out of 131 seats.

The president of the assembly, Luis Miquilena, opened the session by alluding to its apparent right to dissolve other branches of government.

The BBC's Peter Greste: For millions of Venezuelans this is nothing short of revolution

Loud cheers broke out when he declared the body's sovereignty in a hall at the Central University of Venezuela in the capital Caracas. A choir sang the national anthem and other patriotic hymns.

The assembly has six months to draft a new constitution, although the president has challenged it to come up with a document within three months.

The body is the centrepiece of his plan to erase what he says is the political stranglehold of the old parties and usher in a "peaceful revolution".

Mr Miquilena said the revolution would be pushed through "via dialogue and via understanding".

Sinking ship

The Supreme Court ruled in April that the assembly did not have the right to abolish institutions until after it concluded its deliberations and the new constitution was approved by voters in a referendum early next year.

President Hugo Chavez: "Saving the sinking ship"

But President Chavez has repeatedly said the assembly should do away with both Congress and the Supreme Court, which he says are products of a corrupt political culture.

On Tuesday, the president called on the assembly to declare "a national emergency" that would limit congressional power and streamline government agencies.

"Venezuela is a sinking ship," he told reporters in the Caracas.