updated 1/14/2007 5:22:19 PM ET 2007-01-14T22:22:19

Iran and Nicaragua said Sunday they will open embassies in each other’s capitals as Iran’s hard-line president courted leftist allies in Latin America in an effort to offset Washington’s global influence.

Iranian President Mahmoud Ahmadinejad was in Managua as part of a whirlwind series of meetings with Latin America’s newly inaugurated leftist leaders, who are linked as much by their opposition to the United States as by their political tendencies.

Ahmadinejad visited fellow OPEC-member Venezuela on Saturday, pledging with President Hugo Chavez to spend billions of dollars financing projects in other countries.

Ahmadinejad, president of a fundamentalist Shiite theocracy deeply hostile to Washington, was meeting with Nicaragua’s newly inaugurated leftist President Daniel Ortega, whose first government faced a U.S.-backed guerrilla insurgency during the 1980s.

Ortega’s foreign minister, Samuel Santos, told reporters the opening of the embassies in Managua and Tehran was a step toward bringing the two nations closer. They previously had limited ties through Iran’s embassy in Mexico City.

“I’m sure this won’t be the last visit” by Ahmadinejad to Nicaragua, Santos said.

Ahmadinejad’s tour comes as he seeks allies in the international debate over his country’s nuclear program and its alleged meddling in Iraq. The Iranian leader has come under increasing criticism at home, with both conservatives and reformists alike openly saying his provocative remarks have increasingly isolated their country, which now faces sanctions for refusing to halt uranium enrichment.

Ecuador, Bolivia are next
On Monday, Ahmadinejad will attend the inauguration of Ecuador’s new president, Rafael Correa, and meet with Bolivian President Evo Morales, both critics of the Bush administration and its policies in Latin America.

Venezuela and Iran, both oil-rich nations, had previously announced plans for a joint $2 billion fund to finance investments in their own countries, but Chavez and Ahmadinejad said Saturday that the money would also be used for international projects.

“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,” Chavez said.

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

It was not clear if the leaders were referring to investment in infrastructure, social and energy projects — areas that the two countries have focused on until now — or other types of financing.

Before his meeting with Ahmadinejad, Chavez said in his state of the nation address that he had told Thomas Shannon, head of the U.S. State Department’s Western Hemisphere affairs bureau, he hoped for better relations between their two countries.

I hope that everything improves’
Chavez said he spoke with Shannon on the sidelines of Ortega’s inauguration earlier this week, saying, “We shook hands and I told him: ’I hope that everything improves.”’

Chavez — a close ally of Cuban leader Fidel Castro whom Washington sees as a destabilizing influence — has pledged billions of dollars 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.

On Saturday, the U.S. military said five Iranians arrested in northern Iraq last week were connected to an Iranian Revolutionary Guard faction that funds and arms insurgents in Iraq.

Iran’s Foreign Ministry on Sunday denied reports that nuclear activities had stalled at one of its uranium enrichment plants and reiterated it would press ahead with the program, which the West fears could be used to make nuclear arms.

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