Colombian President Alvaro Uribe has arrived in Caracas to meet Venezuelan President Hugo Chavez in an effort to overcome a dispute involving the capture of a leftist Colombian rebel chief in Venezuelan territory.

The dispute has to do with the capture of Rodrigo Granda, a top figure in the Revolutionary Armed Forces of Colombia (FARC), who was seized in the Venezuelan capital Caracas by rogue soldiers of the elite Venezuelan National Guard and spirited out of the country.

He was handed over to Colombian authorities on the border in exchange for a large reward.

Chavez called the incident a violation of Venezuela's sovereignty and broke off commercial ties between the neighbours. He demanded an apology from Uribe.

Admission

Colombia initially claimed Granda had been captured in its territory. Later, Bogota admitted that it had paid a bounty for the arrest of Granda, but denied the incident had violated Venezuela's sovereignty.

Colombia in turn accused Venezuela of harbouring leftist rebels, which Caracas denied.

After weeks of mutual acrimony, both governments decided to mend their differences, but a meeting between the two leaders was needed to fully overcome the impasse. Following this, Uribe arrived in the Venezuelan capital on Tuesday.

Trade between Venezuela, the world's fifth-largest petroleum exporting country, and Colombia, is in the order of $2 billion per year.