CARACAS (Reuters) ? Venezuela's socialist leader Hugo Chavez acknowledged he had surgery for cancer, shaking the political system he has dominated for more than a decade and alarming supporters counting on him to win re-election in 2012.
The usually loquacious Chavez, 56, confirmed in a stern speech on Thursday that he had undergone surgery in Cuba to remove a cancerous tumor and was receiving more treatment. He said he needed to recover before returning to Venezuela to run his self-styled socialist revolution.
Supporters vowed they will continue his leftist drive, which has included nationalization of vast swathes of the economy, a broad diplomatic challenge to Washington's dominance of the region and a steady takeover of an oil industry that is a key supplier to the United States.
"We will live and we will conquer. Until my return!" Chavez ended Thursday night's emotion-charged address from Havana.
In poor Caracas shantytowns, where Chavez is still widely loved for using oil revenues to build new clinics and schools, supporters saluted him with fireworks. "He's alive! He's alive!" one group shouted in the poor Catia area after the speech.
Opposition leaders, seeking to rally around a unity candidate to be picked in February for the 2012 presidential vote, may take the news as a sign Chavez is weakened and less likely to win next year's vote after sweeping repeated elections since 1998.
"For the Republic, the best thing that can happen is for the president to recover and to take over full governance, so that the natural political process can evolve, which is to carry out elections next year," said Teodoro Petkoff, who runs the opposition newspaper Tal Cual.
The opposition was trying hard to avoid appearing gleeful at Chavez's ill health, though some detractors posted vitriolic messages on Twitter and other sites.
Financial markets will watch closely for precise details of his condition or a timeframe for when he could return to power. Venezuelan bonds have rallied on hopes his absence may spur changes in the country's state-dominated economy.
"It is impossible to deduce if he will or will not be in a physical state and the right mood to go into the 2012 campaign," said local analyst Luis-Vicente Leon.
VENEZUELA'S FUTURE
Known for eight-hour speeches and frequent camera appearances, Chavez left Venezuela in near silence and its government functioning at half-steam for almost three weeks after a June 10 operation to remove a pelvic abscess.
His continued convalescence raises questions about how he can still govern from Cuba, whether or not he can control his sometimes unruly coalition, and whether he will in fact be able to rule for another decade as he has often vowed.
Perhaps to answer fears of a power vacuum or succession fight, Chavez said he remained "at the helm" of government" in "permanent communication" with his Vice President Elias Jaua.
Chavez's ministers said the government would remain united and, in their joint appearance immediately after the president's address, pledged commitment to his socialist reforms even in his absence.
Supporters seemed shocked and at times in denial at the news of his cancer, which government supporters had until Thursday passed off as idle rumor spread by the opposition.
Chavez's combative rhetoric, Caribbean folksy charm and social programs from rural villages to shantytowns have allowed him to win almost all the elections his coalition has confronted, undermining the argument of critics who call him a dictator.
But he has alienated many with his authoritarian streak, reflected in his stranglehold on government and belligerent treatment of political opponents, and his aggressive nationalization of a wide range of industries.
His popularity has been weakened in recent years as he has struggled to keep up with bread-and-butter government tasks such as keeping electricity flowing, putting criminals in jail and providing housing for the poor.
Remaining in Cuba could further compromise advances in those areas, especially since state leaders are notoriously slow to make decisions without his direct involvement.
(Additional reporting Mario Naranjo, Daniel Wallis, Deisy Buitrago, Diego Ore, Eyanir Chinea and Girish Gupta; Editing by Andrew Cawthorne and Jackie Frank)
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