President Bush and Mexican President Vicente Fox (search) sought to mend fences on Monday as Fox praised Bush for his new immigration proposal.

Bush was in Monterrey, Mexico, for the 34-nation Summit of the Americas (search) where leaders gathered to discuss trade, security and other issues. The meeting is being billed as an opportunity for Bush and Fox to improve their strained relationship. Immigration was one issue that Fox felt the U.S. had neglected in the last two years.

"This plan is not amnesty," the president said of his plan to match workers with jobs. "I oppose amnesty because it encourages violation of our laws."

Bush is expected to unveil details of his plan in his State of the Union address on Jan. 20, and it is unclear how they will be received by lawmakers.

"In Mexico this is a very important step forward," Fox said of Bush's proposal, which is designed to provide legal status to millions of undocumented immigrants working in the United States.

Speaking of Mexico and other countries, he said, "Our neighbors will benefit as productive citizens return home with money to invest" and help the economies in their own nations.

Other discussion topics at the summit, held in Mexico's third largest city, 150 miles south of the Texas border city of Laredo, include strengthening democracy, ending poverty, security and helping small businesses with low-interest loans.

Amid the congenial handshakes among leaders at the summit will be disagreements. Latin American nations butted heads with the United States until nearly dawn Sunday in failing to agree on several points of a draft document to be debated at the two-day summit.

The United States wants the draft to call for re-emphasizing a 2005 deadline for finishing negotiations on a Free Trade Area of the Americas (search), a hemisphere-wide trade zone that is one of Bush's top policy goals for Latin America. Brazil and Venezuela say the summit is not the place to discuss it.

The United States also wants to kick corrupt governments out of the Organization of American States (search), a move opposed by several Latin American nations.

Argentina's President Nestor Kirchner is upset about recent U.S. criticism over its warming relations with Cuba. U.S. officials privately worry that President Hugo Chavez of Venezuela, who warned U.S. officials on Saturday not to "stick their noses" in his nation's affairs, is working with Cuba to oppose pro-American democracies in the region.

Some Latin American leaders accuse America of being heavy-handed. They argue that the United States has neglected social issues, such as raising the standard of living for some 200 million people — nearly one-half the region's population — who live in poverty.

Bush arrived in this industrial city at midday at an airport where gun-carrying troops and security officers roamed the grounds. He and his wife, Laura, through a phalanx of Mexican officials — all men wearing dark suits.

The couple was followed in the procession of greeting by Secretary of State Colin Powell, national security adviser Condoleezza Rice and White House chief of staff Andy Card. Once in his motorcade, Bush passed large expanses of brush and cactus-covered land. Men digging ditches alongside the road stopped and leaned on their tools to watch him pass by.

On a 90-minute flight here from Texas, Bush got a briefing from Rice and Powell on the Summit of the Americas that Bush and Fox were attending, said press secretary Scott McClellan.

In his meeting with Fox, the spokesman said, the president was to discuss the new immigration policy, strengthened border security and free trade. McClellan dismissed talk of the meeting as an opportunity to air grievances.

"We have a good relationship with Mexico and President Fox is a good friend of the president's," McClellan said. "Whatever differences we had in the past, we have a lot of common challenges that we are working closely together on."

Bush dismayed Fox when he put immigration reform on the back burner after the Sept. 11, 2001, terror attacks. Their relationship further soured when Mexico failed to back the U.S.-led invasion of Iraq.

The trip was Bush's fourth to Mexico since he took office nearly three years ago, more than to any other country. He invited Fox and his wife to visit the presidential ranch in Crawford, Texas, on March 5-6.

The Associated Press contributed to this report.