Israel is withdrawing its ambassador to Venezuela as a row grows between the two countries over the war in Lebanon.
Mr Chavez was welcomed warmly in Iran last week
At the weekend President Hugo Chavez recalled his envoy to Israel and described the Jewish state's campaign in Lebanon as a "new genocide".
On Monday Israel said it would be flying its ambassador back for "consultations".
The BBC correspondent in Caracas says the row marks an all-time low in relations between the two governments.
Mr Chavez has railed against Israel in interviews and statements in recent days, describing its offensive in Lebanon as "genocide".
"Israel has gone mad," he said in a weekly broadcast on Sunday.
"It's attacking, doing the same thing to the Palestinian and Lebanese people that they have criticized - and with reason - the Holocaust. But this is a new Holocaust."
Venezuela's leading Jewish organisation has criticised government representatives and the government-backed media for making anti-Semitic statements.
Mr Chavez was also highly critical of Israel last week during a two-day visit to Iran, a key sponsor of Lebanon's Hezbollah militia.
The Israeli foreign ministry said it was bringing the ambassador back temporarily "as an act of protest against the one-sided policy of the president of Venezuela and in light of his wild slurs against the state of Israel".
Mr Chavez has won some admiration in the Arab world
Ministry spokesman Mark Regev said Israel was concerned that Mr Chavez had allied itself with "the most extreme elements in the region".
"We have a Venezuelan president who embraces the Iranian leader who just a couple of days ago called for Israel to be wiped off the map," said Mr Regev.
The BBC's Greg Morsbach in Caracas says Mr Chavez's stance has won him some admiration in the Arab world.
His fierce rhetoric is seen by many as being geared towards gaining support in countries marginalised by the US, particularly in the hope of securing support for Venezuela's bid for a seat on the UN Security Council, our correspondent reports.