Taiwan leader "not happy" with US snub - reports

ASUNCION, Paraguay, May 7 (Reuters) Taiwan's president is unhappy with Washington's denial of permission for him to stay in the United States, but respects the decision, he said today in an interview with Paraguayan newspapers.

President Chen Shui-bian had hoped to make a stopover on American soil as he traveled to Latin America for an official visit that began last week.

But the United States denied him permission, and instead only offered Chen a chance to make a refueling stop in Alaska -- an offer he turned down.

''We are not happy with the way they handled the issue,'' Chen said in the interview with the Asuncion newspapers ABC Color, La Nacion and Ultima Hora.

''But we respect the explanation from the United States. We do not want to antagonize a country we consider to be a friend,'' he added in comments published in Spanish.

Washington -- Taiwan's most important ally -- usually allows Taiwan leaders to enter the United States in transit, but refuses official visits to avoid angering China, which says the self-ruled island must accept reunification with the mainland after more than a half a century of separation.

Beijing had urged Washington not to agree to Chen's request for a visit to New York.

Chen said US officials explained the decision as due to Washington's need for Chinese assistance on diplomatic issues.

''The United States has indicated to us that the decision was based on the fact they need help from China on several critical issues like North Korea, the situation in Iran, and Sudan,'' he said.

''We consider it deplorable that China takes advantage of a complicated international situation to carry out this kind of political extortion against other countries,'' Chen added.

Paraguay is the only South American country that officially recognizes Taiwan and receives millions of dollars in donations and loans from the self-ruled island each year.

REUTERS SB PC2323