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During Sunday's program, Chavez said his government may expand a military base on the Caribbean island of La Orchila, approximately 110 miles (180 kilometers) off the South American country's central coast.

La Orchila is already home to a small military base, including helicopter landing pads and docks, as well as a presidential residence.

Senator John Ensign, Republican of Nevada, said on CNN that it was “irresponsible for the president” to be seen laughing and joking with “one of the most anti-American leaders in the entire world,” referring to Mr. Chávez.And Senator Lindsey Graham, Republican of South Carolina, pointed to Cuba’s estimated 200 political prisoners. “Release the prisoners and we’ll talk to you,” he said of the Cuban government on Fox News Sunday, adding, “Put up or shut up.”

Mr. Obama defended his overtures at a news conference on Sunday, saying the handshakes and the polite conversation he shared with Mr. Chávez here were hardly “endangering the strategic interests of the United States.”Wrapping up a four-day swing through Latin America, he said he believed he had paved the way for “frank dialogue” with countries like Venezuela and Cuba, whose relations with the United States have been badly strained.But he also sought to calibrate his message, saying Sunday that he had “great differences” with Mr. Chávez and insisting that freedom for the Cuban people would remain the guiding principle of his foreign policy.

The antagonism seemed to melt away, replaced by a palpable enthusiasm for a new openness from the United States and hopes of improved relations for Washington with Venezuela and Cuba, which emerged as a core issue here.

And President Daniel Ortega of Nicaragua, an old Washington nemesis, sought to embarrass Mr. Obama in a nearly one-hour speech filled with anti-American vitriol in which he likened the American embargo of Cuba to the Berlin Wall.

Hoping to push the process forward, leaders from Latin America and the Caribbean have volunteered to aid in a reconciliation between the United States and Cuba. “Brazil would be able to help,” Mr. da Silva said Sunday. In an interview published Sunday in the Spanish newspaper ABC, he said the United States should not wait for Cuba to take the next step in efforts to end their half-century of feuding.

Mr. Chávez took the initiative Saturday, saying he was naming Roy Chaderton, Venezuela’s representative to the Organization of American States, to be his new ambassador to Washington.

Mr. Chávez had ejected the American ambassador to Venezuela in September, saying he had discovered an American-backed plot to remove him from power. Washington responded in kind.

Boosting bilateral trade between Russia and Latin America, which could reach $15bn (£9.9bn) this year, is another priority for the Russian president during his talks.

But the Russian deputy foreign minister, Sergei Riabkov, said suggestions in the media that the naval exercises signal a return to Cold War politics in Latin America were misguided. "There is no geo-political connotation whatsoever," he told the BBC.

Between 2005 and 2007, Venezuela spent around $4bn (£2.6bn) on military equipment - most of it from Russia.

Ties between the two superpowers have become strained because of Washington's plan for a missile defence system in Poland and the Czech Republic - something Moscow is firmly opposed to. Indeed President Medvedev, has said he will deploy missiles in the Russian exclave of Kaliningrad, between Poland and Lithuania, if the US initiative goes ahead in its present form.

Mr Chavez recently took a delegation of Russian top brass to inaugurate a gas platform in the Gulf of Venezuela, co-owned by their respective state-run energy companies - PDVSA and Gazprom.

During the trip, the Russian government also signed joint agreements on issues as diverse as gold and bauxite mining, ceramics and fishing. It is a combination Russian technology and know-how coupled with Venezuela's resources and manpower.

The Venezuelan foreign ministry, however, called Peru's move a "mockery of international law, a strong blow to the fight against corruption and an offence to the people of Venezuela".

Last year Mr Rosales was elected mayor of Venezuela's second biggest city, Maracaibo. He is facing multi-million-dollar corruption charges relating to a previous term as governor of Zulia state. Mr Rosales and his supporters say he is the victim of a political witch-hunt Government supporters accuse him of taking part in a short-lived coup against Mr Chavez in April 2002. Mr Rosales has insisted that it was an honest mistake made in the confusion that followed the announcement of the president's resignation.

Mr. Obama will meet with leaders from the region this weekend. They will discuss the economic crisis, including a plan to replenish the Inter-American Development Bank, a Washington-based pillar of clout that has suffered losses from the financial crisis.

Meanwhile, China is rapidly increasing its lending in Latin America as it pursues not only long-term access to commodities like soybeans and iron ore, but also an alternative to investing in United States Treasury notes.

One of China’s new deals in Latin America, the $10 billion arrangement with Argentina, would allow Argentina reliable access to Chinese currency to help pay for imports from China. It may also help lead the way to China’s currency to eventually be used as an alternate reserve currency. The deal follows similar ones China has struck with countries like South Korea, Indonesia and Belarus.

As the financial crisis began to whipsaw international markets last year, the Federal Reserve made its own currency arrangements with central banks around the world, allocating $30 billion each to Brazil and Mexico. (Brazil has opted not to tap it for now.) But smaller economies in the region, including Argentina, which has been trying to dispel doubts about its ability to meet its international debt payments, were left out of those agreements.

Details of the Chinese deal with Argentina are still being ironed out, but an official at Argentina’s central bank said it would allow Argentina to avoid using scarce dollars for all its international transactions. The takeover of billions of dollars in private pension funds, among other moves, led Argentines to pull the equivalent of nearly $23 billion, much of it in dollars, out of the country last year.

China is also seizing opportunities in Latin America when traditional lenders over which the United States holds some sway, like the Inter-American Development Bank, are pushing up against their limits.

Just one of China’s planned loans, the $10 billion for Brazil’s national oil company, is almost as much as the $11.2 billion in all approved financing by the Inter-American Bank in 2008. Brazil is expected to use the loan for offshore exploration, while agreeing to export as much as 100,000 barrels of oil a day to China, according to the oil company.

The Inter-American bank, in which the United States has de facto veto power in some matters, is trying to triple its capital and increase lending to $18 billion this year. But the replenishment involves delicate negotiations among member nations, made all the more difficult after the bank lost almost $1 billion last year. China will also have a role in these talks, having become a member of the bank this year.

In February, China’s vice president, Xi Jinping, traveled to Caracas to meet with President Hugo Chávez. The two men announced that a Chinese-backed development fund based here would grow to $12 billion from $6 billion, giving Venezuela access to hard currency while agreeing to increase oil shipments to China to one million barrels a day from a level of about 380,000 barrels

Mr. Chávez’s government contends the Chinese aid differs from other multilateral loans because it comes without strings attached, like scrutiny of internal finances. But the Chinese fund has generated criticism among his opponents, who view it as an affront to Venezuela’s sovereignty. “The fund is a swindle to the nation,” said Luis Díaz, a lawmaker who claims that China locked in low prices for the oil Venezuela is using as repayment.

“This is China playing the long game,” said Gregory Chin, a political scientist at York University in Toronto. “If this ultimately translates into political influence, then that is how the game is played.”

“The specter of Iran raises red flags in a way that China doesn’t, because China tends to respect the American sphere of influence,” said Julia E. Sweig, a Latin American expert at the Council on Foreign Relations.

Iran’s motives are murkier, according to administration officials. It has cultivated wide-ranging economic ties with Venezuela and, to a lesser extent, Nicaragua. But it has also been linked to the bombing of a Jewish community center in Buenos Aires in 1994, which killed 85 people.

Iran is not known to have a big presence in El Salvador, officials said, and it was not represented at Mr. Funes’s inauguration. But the change in power after 17 years of a pro-American right-wing government could offer an opening.

And noting the unrest in Iran since the disputed June presidential election, she added: "We have seen in the last weeks that Iran has not respected its own democracy.""It has taken actions against his own citizens for peacefully protesting," she said, referring to street demonstrations challenging the re-election of President Mahmoud Ahmadinejad.

"I think it is not a very smart position to ally with a regime that is being rejected by so many of their own people," Clinton said in the interview.The administration of President Barack Obama, Clinton added, thinks "it is not in the best interest" of the world to be doing business with Iran that would "promote the regime... that is not smart."

Clinton also expressed renewed concern at the political and economic alliance between Venezuela and Iran, although she noted Washington was attempting to "lower the temperature" in the country's often tense relations.

The South American country's strongman leader Hugo Chavez, a fierce US critic, is Iran's main ally in the region. Chavez has defended Ahmadinejad numerous times in recent weeks."We call on the world to respect Iran because there are attempts to undermine the strength of the Iranian revolution," Chavez said last month after the election.

The United States has returned its ambassador to Caracas after almost a year without official diplomatic relations between the countries."We are trying to lower the temperature," Clinton said. "We want to make it clear that there are ways for us to have a conversation with people we don't agree with on many issues."

"Let me be clear: I am not interested in talking for the sake of talking. But I do believe that we can move U.S.-Cuban relations in a new direction."

"I am prepared to have my administration engage with the Cuban government on a wide range of issues -- from human rights, free speech and democratic reform to drugs, migration and economic issues," he said.

They come a day after Cuban President Raul Castro said he was prepared to discuss "everything, everything, everything" with the United States. Castro told a summit of leftist Latin American leaders gathered in Venezuela, "We are prepared, wherever they want, to discuss everything -- human rights, freedom of the press, political prisoners," Castro said Thursday.

Chavez's press office said Obama walked up to Chavez to greet him, a meeting it called "historic." "President Chavez expressed his hope that relations between the two countries would change," the press office said, quoting Chavez as having told his U.S. counterpart, "Eight years ago with this same hand I greeted Bush. I want to be your friend." It said Obama then thanked Chavez.

Obama's push for a rapprochement with Havana is supported by most Americans, 71 percent of whom said they favor re-establishing diplomatic relations, according to a CNN/Opinion Research Corp. poll carried out April 3-5.

This week, the president opened the door to the discussions by abandoning longstanding restrictions on the ability of Cuban-Americans to travel freely to the island and send money to relatives there.

“I know there is a longer journey that must be traveled in overcoming decades of mistrust, but there are critical steps we can take toward a new day,” Mr. Obama said, adding that he was “prepared to have my administration engage with the Cuban government on a wide range of issues — from human rights, free speech, and democratic reform to drugs, migration, and economic issues.”

He said the United States needed to acknowledge long-held suspicions that it has interfered in the affairs of other countries. But, departing from his prepared text, he also said the region’s countries needed to cease their own historic demonization of the United States for everything from economic crises to drug violence.“That also means we can’t blame the United States for every problem that arises in the hemisphere,” he said. “That’s part of the bargain. That’s the old way, and we need a new way.”

On Cuba, the president’s words were as notable for what he said as for what he did not say. He did not scold or berate the Cuban government for holding political prisoners, as his predecessor, George W. Bush, often did.

But he also did not say that he was willing to support Cuba’s membership in the Organization of American States, or lift the 47-year-old trade embargo against Cuba, as some hemisphere leaders here want him to do.

“Let me be clear,” he said. “I am not interested in talking for the sake of talking. But I do believe we can move U.S.-Cuban relations in a new direction.”

The new tone from Washington drew warm praise from leaders like President Cristina Fernández de Kirchner of Argentina and President Daniel Ortega of Nicaragua. Mr. Ortega, who said he felt ashamed that he was participating in the summit meeting without the presence of Cuba, evoked images of the collapse of the Berlin Wall, saying, “I am convinced that wall will collapse, will come down.”

Mrs. Kirchner praised Mr. Obama for “what you did to stabilize the relationship from the absurd restrictions imposed by the Bush administration,” adding: “We sincerely believe that we in the Americas have a second opportunity to construct a new relationship. Don’t let it slip away.”

Mr. Obama’s speech on Friday night was only the latest in a string of overtures between the countries. On Thursday, Raúl Castro, Cuba’s president, used unusually conciliatory language in describing the Obama administration’s decision to lift restrictions on family travel and remittances.

“We are willing to discuss everything, human rights, freedom of press, political prisoners, everything, everything, everything they want to talk about, but as equals, without the smallest shadow cast on our sovereignty, and without the slightest violation of the Cuban people’s right to self-determination,” Mr. Castro said in Venezuela during a meeting of leftist governments meant as a counterpoint to this weekend’s summit meeting in Trinidad and Tobago.

On Friday, Mrs. Clinton responded, saying, “We welcome his comments, the overture that they represent, and we’re taking a very serious look at how we intend to respond.”

Earlier this week Brazilian officials signaled in Rio de Janeiro that President Luiz Inácio Lula da Silva, potentially flanked by the Colombian president, Álvaro Uribe, would raise the issue of accepting Cuba into the Organization of American States at the summit meeting. Cuba’s “absence is an anomaly and he is waiting for this situation to be corrected,” Marco Aurélio García, Mr. da Silva’s foreign policy adviser, told reporters.

On Friday, the secretary general of the O.A.S., José Miguel Insulza, said he would call for Cuba to be readmitted. And Mr. Chávez recently said he would refuse to sign the official declaration produced at the summit meeting because Cuba was not invited.