By NBF News
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VENEZUELAN President Hugo Chavez has dared the United States (U.S.) to expel his ambassador or cut off diplomatic ties in retaliation for his rejection of Washington's choice for ambassador to Caracas.

Tensions have been growing over Chavez's refusal to accept American diplomat Larry Palmer and also over U.S. criticisms of a legislative offensive by the president's congressional allies. Lawmakers have granted Chavez expanded powers to enact laws by decree for the next year and a half, a change that opponents condemn as antidemocratic.

Chavez has said he will not accept Palmer to be ambassador due to comments he made earlier this year suggesting that morale is low in Venezuela's military and that he is concerned Colombian rebels are finding refuge in Venezuela.

The U.S. State Department has said it stands behind its nomination of Palmer, who is awaiting Senate confirmation. State Department spokesman P.J. Crowley said last week that Venezuela's decision to reject Palmer – after initially giving consent – will have consequences on relations with Caracas, and that the U.S. government will evaluate what to do.

'If the government is going to expel our ambassador there, let them do it!' Chavez said in a televised speech on Tuesday night. 'If they're going to cut diplomatic relations, let them do it!'

'Now the U.S. government is threatening us that they're going to take reprisals. Well, let them do whatever they want, but that man will not come,' Chavez said.

There was no immediate reaction from the U.S. Embassy in Caracas, which has been without an ambassador since Patrick Duddy finished his assignment and left in July.

Chavez, whose economy relies heavily on oil sales to the United States, has accused Palmer of dishonoring the Venezuelan government by expressing concerns on several sensitive subjects – including 2008 accusations by the U.S.    Treasury Department that three members of Chavez's inner circle helped Colombian rebels by supplying arms and aiding drug-trafficking operations.

'For an ambassador to come, he has to respect this homeland,' Chavez said.

Chavez's latest actions in pushing through controversial laws are contributing to the diplomatic tensions. The measures have been hurriedly passed before a new legislature takes office January 5 with enough opposition lawmakers to prevent passage of some types of major laws.

The National Assembly on December 17 granted Chavez special powers to bypass congress and decree laws for a year and a half.    Opponents have condemned that and a package of other laws approved by Chavez's congressional allies this month, saying they amount to an authoritarian power grab and will give Chavez new abilities to crack down on dissent.

The State Department has raised similar concerns. Crowley described the decree powers as one more way for the leftist president to 'justify autocratic powers.'

Chavez has defended his decree powers as necessary, saying he is trying to quickly provide funding for housing construction after floods and landslides that drove thousands from their homes, and also plans measures to accelerate his government's socialist-oriented efforts.

Chavez said on Tuesday that he had signed a decree to establish 10 military districts – many of them in three western states bordering Colombia, two of which are led by opposition governors. Chavez did not elaborate on how the districts will be administered, but they could be under the equivalent of martial law.

He had discussed the idea previously, calling the special military zones an effort to boost security. He said Tuesday that he expects to create more such districts, including in urban areas such as Caracas and Maracaibo.

Other laws passed by Chavez's congressional allies this month increase state control of universities and block foreign funding to any nongovernment organizations that defend 'political rights' – a change critics say will hobble some human rights groups.

The National Assembly also passed laws that make it easier for the government to revoke television or radio licenses, speed up the process if Chavez decides to nationalize more banks, and allow for the suspension of any lawmakers who defect from a party during their term.

One of the most controversial laws extends broadcast-type regulations to the Internet – barring messages that 'disrespect public authorities,' 'incite or promote hatred' or crimes, or that could create 'anxiety in the citizenry or alter public order.'

Critics say such broadly worded measures will give the government a free hand to target any messages deemed offensive, and could lead Venezuelans to be less open about their criticisms of the government online.

'The president is only interested in maintaining power, but he doesn't take his responsibilities seriously,' said Julio Borges, a newly elected opposition lawmaker. Borges told reporters that the opposition will propose a law aimed at getting guns off the streets because the government has failed to address gun violence.

Venezuela has one of Latin America's highest murder rates. The human rights group Provea says there were 13,985 homicides reported in the country of 28 million people in 2009.