CARACAS (Reuters) - Venezuela's President Hugo Chavez pushed a vague peace plan for Libya on Thursday, saying his friend Muammar Gaddafi supported foreign mediation and accusing the West of eyeing the North African nation's oil.
Though rebels have rejected talks with the Libyan president and some analysts view the Chavez plan as grand-standing, the socialist leader said the idea had gained traction in Tripoli.
"I was able to speak to Gaddafi yesterday and we proposed a negotiating commission and he said yes," Chavez said, adding that he had also discussed the idea with other Latin American, Middle East and African nations.
"I hope they don't invade Libya ... we want peace."
Gaddafi's son Saif al Islam told Sky News he appreciated the offer but said there was no need for help from Venezuela.
"They are our friends, we respect them, we like them, but they are far away. They have no idea about Libya. Libya is in the Middle East and North Africa. Venezuela is in Central America. We appreciate this," he said.
The Arab League said it was considering the idea but needed more details. Oil markets gave the mediation plan some credence, with prices falling after a rally on worries that the Libya crisis will hit supplies.
Both Chavez and Gaddafi are military men who have cast themselves as anti-imperialist revolutionaries and forged a friendship during half a dozen encounters in the last decade.
Much like his mentor, Fidel Castro of Cuba, Chavez often takes a vocal role in international crises, although his efforts to influence events do not always bear fruit.
Perhaps seeking to increase the plan's credibility, a government source said Venezuela hoped to convince Brazil's former president Luiz Inacio Lula da Silva to lead mediation.
Brazil backed a unanimous U.N. security council vote to impose sanctions on Libya last week. In 2010, Lula sought to raise Brazil's global profile by proposing the South American nation as an unbiased mediator in the crisis over Iran's nuclear program, but was rejected by Western nations.
ACCUSATIONS OF INVASION PLAN
Analysts are skeptical Chavez can help bring a quick end to the fighting in Libya, where Gaddafi faces an increasingly organized rebel army that has said it would only negotiate an end to the leader's 41-year rule.
"Chavez's credibility does not fly very high," said Olivier Jakob of think tank Petromatrix.
"The only value of such a proposal is if it offers some honorable way out for the Gaddafi clan."
Chavez, who has won plaudits in the Arab world for his condemnation of Israel, says Washington is exaggerating reports of repression to justify an invasion of Libya to steal its oil wealth.
"No to the imperialist intervention in Libya! No to the new war that seeks oil at the cost of innocents' blood," he said.
An international war over Libya could send oil prices over $200 to the barrel "and that wouldn't be good for anyone," Chavez added in a speech to a meeting of his Socialist Party.
Along with fellow left-wingers Castro and Nicaraguan President Daniel Ortega, Venezuelan officials point to Libya's relatively high levels of education and healthcare to suggest the uprising is over oil not living conditions.
Ecuador, another Chavez ally, said foreign ministers from the left-wing ALBA bloc of Latin American nations would meet in Caracas on Friday to discuss Libya.
Venezuela has been mentioned as a possible destination for Gaddafi if he abandons Libya. He visited the South American fellow OPEC member in 2009, donating a Bedouin tent to Chavez.
A small group demonstrated outside the Libyan Embassy in Caracas calling Chavez an apologist for "assassin" Gaddafi.
(Additional reporting by Eyanir Chinea; Editing by Andrew Cawthorne and Todd Eastham)
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