By Frank Jack Daniel and Arshad Mohammed
CARACAS/WASHINGTON (Reuters) - The United States on Fridayimposed sanctions on Venezuelan officials it accused of helpingColombian rebels smuggle drugs, deepening a diplomatic crisisthat raised the spectre of an oil supply cutoff.
The U.S. Treasury Department said Venezuela's top twointelligence chiefs and a recently retired interior minister ofhad assisted Marxist guerrillas fighting the U.S.-backedColombian government to traffic in cocaine and guns.
The United States banned U.S. citizens from having dealingswith the officials and froze any U.S. assets they may own.
The sanctions were announced in Washington a day afterVenezuelan President Hugo Chavez threatened to stop crude salesto the United States and expelled the U.S. ambassador, plungingrelations to the lowest point in years.
Chavez acted after his ally Bolivian President Evo Moralesthrew out the U.S. ambassador, accusing him of stirring upprotests against the leftist government.
Chavez, who calls Cuba's Fidel Castro a mentor and seesRussia as a counterbalance to U.S. power, had warned onThursday that world crude prices would immediately double toabove $200 a barrel if he cuts oil to the United States.
The clash was part of a long-brewing conflict between theUnited States and Latin America's bloc of left-wing leadersantagonistic to traditional U.S. dominance in the region.
Tensions were already high after Chavez allowed two Russianlong-range bombers to land in Venezuela and took Moscow's sidein disputes over Georgia and U.S. plans for a missile shield ineastern Europe.
Chavez ejected the U.S. ambassador to Venezuela in anexpletive-laden tirade against "Yankees" on Thursday. Hondurasweighed in on Friday, blocking a U.S. envoy from immediatelytaking up his post as ambassador.
INTERNAL CHALLENGES
Washington said on Friday it was expelling the Venezuelanambassador.
State Department spokesman Sean McCormack denied the UnitedStates had done anything wrong in the countries and said theiraction "reflects the weakness and desperation of these leadersas they face internal challenges."
The Treasury Department accused ex-Interior Minister RamonRodriguez of being was Venezuela's main weapons contact for theRevolutionary Armed Forces of Colombia, or FARC, and had tried"to facilitate a $250 million dollar (140 million pound) loanfrom the Venezuelan government to the rebels in late 2007."
It accused him and Venezuela's two top intelligence chiefsof "materially assisting the narcotics trafficking activities"of FARC. Washington considers the FARC, which uses drug moneyto fight Colombia's U.S.-allied government, a terroristorganization.
The United States has criticized the Chavez government fornot doing enough to stop Colombian cocaine passing through itsborders on the way to U.S. and European cities.
This year, laptops found by Colombia in a rebel camp wereseized on by Washington as evidence of cooperation betweenVenezuelan officials and Colombian rebels.
Chavez said he would not restore normal ties before U.S.President George W. Bush leaves the White House in January.
It is unclear whether Chavez knew in advance that U.S.sanctions were coming against his officials, but Rodriguezresigned unexpectedly last weekend.
Chavez, an ex-soldier trained in a tank division, wasbriefly ousted in a 2002 coup initially welcomed by Washington.Even at that time, Chavez did not go so far as to expel theU.S. ambassador and has been a reliable oil supplier.
(Editing by Saul Hudson and David Storey)
