Venezuelan President Hugo Chavez waves during his welcoming ceremony at the parliament building in Kuala Lumpur, Malaysia. AFP PHOTO/ TENGKU BAHAR

Chavez's popularity in Syria and the Arab world has shot up after he ordered Venezuela's envoy in Israel home earlier this month to protest the Israeli invasion of southern Lebanon and threatened to break off diplomatic ties with the Jewish state.

"This visit aims to renew Venezuela's backing for Syria and its just stance," Nader al-Andari, Venezuela's ambassador to Damascus, told Syria's state news agency.

President Bashar al-Assad will hold talks with Chavez at a hilltop palace overlooking Damascus on Wednesday.

Venezuela's and Syria's relations with the United States have plummeted in the last few years. Caracas and Washington argued last week over Venezuela's impounding of cargo that the U.S. embassy said was protected by diplomatic protocol.

The United States imposed sanctions on Syria in 2004 for allegedly backing terrorism. Damascus shrugged off calls by Washington, Israel's chief ally, to pressure Hizbollah to cave in to Israeli demands during the recent war.

During Chavez's visit, Syrian and Venezuelan officials are expected to sign pacts that include transport and oil, of which Syria produces 400,000 barrels a day, far less than Venezuela, the world's fifth-largest oil producer.

There are an estimated 1 million Venezuelans of Syrian descent.

Chavez, a critic of U.S. foreign and trade policies, has sought to enhance Venezuela's ties with U.S. foes such as Iran and Cuba, despite Washington's criticism of what he calls a socialist revolution.He was in Malaysia for a three-day visit that started on Sunday. From Syria, he flies to Angola.

In Kuala Lumpur, Chavez urged Malaysian businessmen to invest in Venezuela's energy, telecommunications, construction and food-processing sectors.

The nations plan an investment-guarantee fund aimed at smoothing investment, and hoped to sign pacts on business ties during a visit to Venezuela planned by the Malaysian prime minister in December, Chavez said.

"The new geopolitics of the world is tied to the bilateral relations of countries like us," he said, adding Venezuela sought investment to help revitalise Caracas.

Part of that investment could eventually be paid off in oil, Chavez said, noting that the national oil companies of the countries were in talks on ways to cooperate.