As the marchers packed the streets to the rhythm of Salsa and drums, a buoyant Chavez - otherwise beleaguered by an opposition campaign to oust him - said his rivals would not succeed.
"The opposition talks about a referendum, but they don’t really want one. It’s a trick, because they know if there is one we will crush them," Chavez told the rally.
The rally came only days after the opposition took out a huge rally in the capital for a referendum on the president's ouster.
Security officials said one person died and 21 others were injured when a security fence collapsed under the weight of the surging crowds.
The show of strengths by both camps cap a year-long bitter political conflict that has left Venezuela divided and its economy in virtual tatters.
After failing to topple Chavez with a recent two-month oil strike, Venezuela's opposition on Wednesday petitioned the electoral authorities with 3 million signatures and insisted on a vote on the president's ouster.
Venezuela's constitution allows for such a referendum halfway through a president's term. But the vote faces host of legal hurdles and the opposition fears Chavez will block it.
Chavez says he is battling opposition leaders and business elites, who feel threatened by his pro-poor policies. But his rivals blame him for the country's economic decay.