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Last Updated: Friday, 26 May 2006, 19:56 GMT 20:56 UK
Chavez and Morales in trade deals
Hugo Chavez (R) with Evo Morales in Bolivia
Hugo Chavez (R) is greeted in Bolivia, with Evo Morales
Venezuelan President Hugo Chavez has arrived in Bolivia and signed a number of far-reaching accords with his counterpart Evo Morales.

The deals include alliances between the state-owned oil companies and new joint mining and fertiliser ventures.

Mr Chavez is a strong critic of the US and his growing ties with gas-rich Bolivia are causing Washington concern.

On Friday, Venezuela also signed a deal - delayed by pressure from the US - for eight military patrol boats from Spain.

Washington says Mr Chavez is working to undermine US influence in the region.

Mr Chavez has already pledged $140 million (75m) in donations and loans to Bolivia.

'Axis of good'

The agreements were signed at a ceremony in the remote Bolivian town of Sinahota in what BBC South America correspondent Daniel Schweimler says was more than just another trade deal.

Hundreds of villagers lined the road to Sinahota, 600km (370 miles) south-east of La Paz. Children waved homemade Venezuelan flags.

Venezuela President Hugo Chavez. File photo
Mr Chavez has described President Bush as a "terrorist"

Cuban Vice-President Carlos Lage was also at the ceremony and the three signed a number of accords they say will create more than 230,000 jobs in Bolivia, the poorest country in South America.

Investment will go into Bolivia's recently nationalised energy industry.

Some will also go into increasing production of the coca leaf, the raw material in the manufacture of cocaine.

However, President Morales has said the crop will be put to legal uses.

Cuba, Venezuela and Bolivia are building an alternative trade bloc to the free trade agreements being promoted by the United States.

Mr Morales says his alliance is an "axis of good".

Our correspondent says the three believe their system will benefit workers, peasants and indigenous people while their opponents see them forging a dangerous left-wing coalition.

Mr Morales rose to power as the head of the coca farmer's union and previously clashed with Bolivian troops trying to eradicate coca production under a Washington-backed programme.

US President George W Bush recently said democracy was being eroded in Bolivia and Venezuela.

Spain and Venezuela say the patrol boat deal will be for peaceful purposes, such as curbing the drugs trade.

The deal was held up by American officials who accuse Venezuela of threatening the military stability of South America.

Mr Chavez on Friday also said he was interested in buying fighter planes from the Russians.

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