The presidents of Venezuela and Iran, whose efforts to extend their influence have alarmed officials in Washington, said Saturday they were ready to spend billions of dollars to help countries free themselves from U.S. domination.

The two oil-exporting countries had previously announced plans for a joint US$2 billion fund to finance investments in Venezuela and Iran, but on Saturday Venezuelan President Hugo Chavez and Iran's Mahmoud Ahmadinejad said the money would also be used for projects in friendly third countries.

"It will permit us to underpin investments ... above all in those countries whose governments are making efforts to liberate themselves from the (U.S.) imperialist yoke," said Chavez, who met with the Iranian leader in Caracas on Saturday.

"This fund, my brother," Chavez said referring to Ahmadinejad, "will become a mechanism for liberation.

"Death to U.S. imperialism!" he said.

Ahmadinejad called it a "very important" decision that would help promote "joint cooperation in third countries," especially in Latin American and African countries.

Chavez — a close ally of Cuban leader Fidel Castro whom Washington sees as a destabilizing influence — has pledged billions of dollars of help to the region in foreign aid, bond buyouts and preferentially financed oil deals.

Iran, meanwhile, is allegedly bankrolling militant groups in the Middle East like Hamas and the Islamic Jihad, as well as insurgents in Iraq, in a bid to extend its influence.

Ahmadinejad's visit Saturday — his second to Venezuela in less than four months — comes as he seeks to break international isolation over his country's nuclear program and possibly line up new allies in Latin America.

His visit to Caracas is the first stop on a Latin America tour, which will also take him to newly elected leftist governments in Nicaragua and Ecuador that, like Venezuela, are seeking to reduce Washington's influence in the region.

Chavez and Ahmadinejad have been increasingly united by their deep-seated antagonism to Washington. Chavez has become a leading defender of Iran's nuclear ambitions, accusing the United States of using the issue as a pretext to attack a regime it opposes and promising to stand with Iran.

Ahmadinejad, meanwhile, has called Chavez "the champion of the struggle against imperialism."

On Saturday, he congratulated Chavez on his December re-election and said the Venezuelan people were wise to choose "a person as important on the world stage, a person so wise as Hugo Chavez."

The increasingly close relationship has alarmed some, and critics of Chavez accuse him of pursuing an alliance that does not serve Venezuela's interests and jeopardizes its ties with the United States, the country's top oil buyer. Venezuela is among the top five suppliers of crude to the U.S. market.

Both countries are members of the Organization of Petroleum Exporting Countries, Chavez said Saturday that they had agreed to back an oil production cut in the cartel in order to stem a recent fall in crude prices.

"We know today there is too much crude in the market," Chavez siad. "We have agreed to join our forces within OPEC ... to support a production cut and save the price of oil."

The two governments, which already plan to jointly produce everything from bricks to bicycles and develop oil fields in Venezuela, signed another 11 accords Saturday to explore further opportunities for cooperation in areas like tourism, education and mining.

Ahmadinejad is set to travel on Sunday to Nicaragua to meet newly inaugurated President Daniel Ortega, a former Marxist guerrilla. On Monday, he travels to Ecuador for the inauguration of President-elect Rafael Correa, another outspoken critic of the administration of U.S. President George W. Bush and Washington's policies in Latin America.