Brazil's Lula urges US initiatives in Latin America

BRASILIA, Sept 28 (Reuters) The United States needs to drop its preoccupation with left-wing leaders in Latin America and play a bigger role in helping developing the region's economy, Brazilian President Luiz Inacio Lula da Silva said.

''The United States needs to understand that the Cold War is over, this issue of who is Communist and who isn't, is over,'' Lula said when asked about the rivalry between Venezuela and the United States during a television interview yesterday.

''I've told Bush, the United States needs to have a pro-active policy toward Latin America,'' Lula told Record News television channel. ''All countries want to develop ... and the United States can help.'' Any cooperation between US President George W Bush and Venezuelan President Hugo Chavez would be the first between two leaders whose governments clash over everything from oil prices to arms deals to democracy.

US officials say Chavez, who calls Cuban leader Fidel Castro his mentor, undermines Venezuela's democracy and is a destabilizing influence in the region.

Lula, who began his second term in January, said Brazil had good relations with both countries because they were important trading partners.

Washington and Caracas had historic differences because ''Chavez thinks Bush ordered a coup against him,'' Lula said, adding that part of their difference were merely rhetoric.

Lula and Chavez have worked together toward South American integration as a counterbalance to the interests of wealthy countries in the region. But Lula has distanced himself of Chavez's nationalist and anti-market policies.

Brazil and the United States forged a strategic alliance this year to promote ethanol production in the region.

Reuters KK VP0632