Caracas, Venezuela ? Venezuelan President Hugo Chavez proclaimed a “knockout” victory in the Summit of the Americas after helping thwart a U.S.-backed free trade zone, strengthening his position as Latin America’s most vocal rival of President Bush and as a maverick unafraid of irritating his neighbors.

The fiery leader was buoyed by the emergence of a five-nation bloc opposed to the trade pact and was cheered by thousands of anti-Bush protesters at the summit in Argentina.

But some say it’s too soon for Chavez to declare victory, and that while he has begun to deliver on promises to share Venezuela’s oil wealth with the poor at home and abroad, his heavy spending on handout programs could leave him overextended.

“Bush lost by total knockout,” Chavez said after the summit in Mar del Plata, calling the U.S.-proposed Free Trade Area of the Americas a “fallacy” designed to allow richer nations to exploit poorer ones.

The United States argues the free trade zone would create jobs and build better lives for the region’s poor. But Chavez proclaimed “the FTAA is dead,” and emotions ran high as crowds of protesters clashed with riot police in the streets on Friday.

Bush, unable to get the 34 nations to agree on reviving the stalled pact, left the negotiations early. Mocking Bush for leaving “with his tail between his legs,” Chavez crowed to reporters that he was savoring the sweet “honey of victory.”

Five nations opposed the free trade proposal: South America’s two-largest economies, Brazil and Argentina, plus Uruguay, Paraguay and Venezuela, which has the continent’s largest oil and gas reserves.

But while Chavez rattled some with his sharp comments about U.S. policies, it was Brazilian President Luiz Inacio Lula da Silva who quietly gained Bush’s ear. In a friendly post-summit meeting, Bush said he agreed with Silva that the U.S. should aim to drop agriculture subsidies so it is easier for farmers in the developing world to compete.

The U.S. has raised concerns about the health of Venezuelan democracy under Chavez, but the Venezuelan leader insists he supports democratic principles.

Mexican President Vicente Fox headed a camp opposing Chavez and was sharply critical of all countries that did not want to join the free trade zone, calling for the 29 supporting nations to go ahead with talks without the dissenters.