Brazilian president Luiz Inácio Lula da Silva welcomed last week's entry of Venezuela into Mercosur and said regional integration is the main axis of his administration's foreign policy.

In an interview with the Financial Times, Lula admitted talking on several opportunities with Venezuelan president Hugo Chavez about the need to act in such a way that it doesn't create problems to other countries and leaders and emphasized that "Venezuela and United States" need each other.

"Venezuela's incorporation opens up new opportunities to pursue economic integration on the continent. Venezuelan oil resources enhance the prospects for funding infrastructure projects," said the Brazilian president who insisted in downplaying concerns over the growing influence in the region of Hugo Chávez.

On the subject of Mr Chávez's anti-Americanism, the president said Venezuela and the US need each other. "One day I spoke to Bush and Chávez.

I said this fight between you is very interesting. Venezuela could stop selling oil and create a delicate situation for the US. Bush could stop buying and do the sa