Brazilian President Luiz Inacio Lula da Silva, the leader of the continent's largest economy who has moved closer to U.S. President George W. Bush over ethanol output, swiped at Chavez, rejecting his fellow leftist's criticism of their plan.
Chavez, who wins political influence with the OPEC nation's subsidized energy exports to its neighbors, denounced Bush's project to promote ethanol production in developing countries as a sure-fire way to increase hunger by lifting food prices.
But Lula, who has cultivated ties with both right-winger Bush and his leftist antagonist Chavez, said there was sufficient arable land in South America.
"We have a huge territory, not only in Brazil, but in all South American countries, and Africa, which can easily produce oil seeds for biodiesel, sugar cane for ethanol, and food at the same time," Lula said on his weekly radio show before arriving at the two-day, 12-nation summit.
Venezuela, the fifth-largest exporter of oil to the United States, has urged Latin America to pass over ethanol and instead rely on its vast oil reserves and cooperate in developing ways to reduce energy consumption.
Aides to Lula say ethanol is his obsession despite being labeled genocidal by Cuban leader Fidel Castro, Chavez's political mentor.
In public, Chavez and Lula shared hugs, smiles and quips about soccer as they toured of a Brazilian-Venezuelan petrochemical project.
But they also said they wanted to discuss ethanol behind closed doors.
Lula's foreign policy adviser played down the differences and urged the continent to harness both fossil and biofuels for economic development.
"If we are intelligent in making this combination, we will completely transform South America into the world's biggest energy power," Marco Aurelio Garcia told reporters on the sidelines of the summit.
NORTH VS SOUTH
Chavez wants the South American summit on the Caribbean tourist island of Margarita to focus on regional integration as a counterweight to the United States and can expect support from the leaders of countries such as Bolivia and Ecuador.
"We are above all South -- South -- Americans ... and we should put all efforts into creating the great homeland that is South America," he told presidents from the region in a speech decrying what he said was the U.S. colonialism of the "North"
"That's why these meetings are so important," he said.
Security is tight at the summit for almost a dozen heads of state.
In the last few days, gray military vessels have churned through crystalline waters and helicopters have clattered above sunbathers on the island that is popular with Venezuelan vacationers for its white-sand beaches and tax-free stores.
Local authorities also spruced up the island, repainting street markings and replacing roadside lampposts leading to the airport.
Ecuadorean President Rafael Correa, fresh from a resounding referendum victory back home on Sunday, was inspired.
Pointing at the airport to the nations' flags, several of which are tricolors of yellow, red and blue, he said, "They speak to us of a common past, waiting to find a common present and future."
