At a joint news conference, Chavez said Venezuela would supply 150,000 barrels of diesel monthly to Bolivia to supplant the impoverished country's imports.

"I won't accept you paying us a cent, you are going to pay us in agricultural products," said Chavez, adding that the offer was worth $180 million a year.

Chavez also said Venezuela would donate $30 million to the  government of Evo Morales after his inauguration.

Morales arrived in Caracas on a specially arranged Cuban jetliner on Tuesday and was received by Chavez with full military honours.

Crowds of pro-government supporters cheered as the two leaders arrived at the National Pantheon in downtown Caracas then headed to a private meeting at Miraflores Palace.

The two leaders signed agreements on energy, health and education cooperation, officials said, without providing details.

Tour

Fresh from a visit to Cuba where he met Fidel Castro, Morales said on Tuesday during his brief stop in Caracas at the start of a seven-nation world tour that he and the Venezuelan leader were uniting in a "fight against neo-liberalism and imperialism".

"The time of the people has arrived. This is the new millennium of the people"

Evo Morales,
president of Bolivia

Morales's next stops are Spain, France, Belgium, South Africa, China and Brazil, but not Washington.

Morales's spokesman says he was not invited to Washington, where officials have expressed concern of the growing alliance between Morales, Chavez and Castro.

Morales, who takes office as Bolivia's first Indian president on 22 January, predicted on Tuesday that more leftist leaders would come to power in the region.

"The time of the people has arrived. This is the new millennium of the people," he said before leaving for Spain.

Morales's trip is expected to explore the future of Bolivia's vast natural gas holdings, the second-largest in South America, which the president-elect says he wants to nationalise.

It is also designed to show that the coca-growing protest organiser has the presidential grit to hold his own on the world stage and tackle the deep problems of his country, including poverty and political instability.

Axis of good

The two leaders signed accords on
energy, health, education

On Tuesday, he clearly set Washington's fiercest Latin American critics as his models, praising Castro and Chavez.

"We are in times of change," Morales said on Tuesday.

"This movement is not only in Bolivia; Fidel in Cuba and Hugo in Venezuela are logging triumphs in social movements and leftist policies," he said.

"We are going to change Bolivia, we are going to change Latin America," Morales said.

Chavez on Tuesday referred to the three leftist leaders as "an axis of good", a play on George Bush's reference to North Korea, Iran and pre-war Iraq as the "axis of evil."

Private meeting

Just back from his first trip abroad over the weekend, to communist Cuba, Morales met on Monday with David Greenlee, the US ambassador, but representatives of both sides said the meeting was private.

"We'll see what kinds of policies President Morales pursues. And, based on that, we'll see what kind of relationship the United States and Bolivia will have"

Sean McCormack, the State Department spokesman

The US Embassy in Bolivia, in a statement, declined to comment on the meeting between Morales and Greenlee, citing its policy to not discuss details of diplomatic conversations.

Morales vowed during his campaign to be Washington's "nightmare," but has said he is open to developing relations with the United States.

American officials, too, have said they hope to work with Morales.

Sean McCormack, the State Department spokesman said: "We'll see what kinds of policies President Morales pursues, and, based on that, we'll see what kind of relationship the United States and Bolivia will have."