CARACAS (Reuters) ? Venezuela's army chief sought to quash any talk of unrest or infighting as socialist leader Hugo Chavez's revelation of cancer surgery shakes the South American OPEC nation he has dominated since 1999.
General Henry Rangel Silva said on Friday the military would guarantee constitutional order during Chavez's absence for treatment in Cuba. The president, he said, would be home "soon" and was still in charge.
"We have seen our comandante thinner than usual but still standing. The truth is he is getting better, he's fine," Rangel told state television. "The country is calm."
The usually vivacious Chavez, 56, confirmed in a stern speech on Thursday he had surgery in Cuba to remove a cancerous tumor and was receiving more treatment. He said he needed time to recover before returning to Venezuela to run his self-styled revolution.
A fiery critic of the United States, Chavez will miss events marking Venezuela's 200th anniversary of independence from Spain. He had to cancel a regional summit planned for the momentous July 5 date.
Markets have generally reacted positively to news of Chavez's health problems, on the presumption they improve the chances of a more business-friendly government.
That sentiment continued on Friday with Venezuela's benchmark 2027 bond up 3.5 points to its highest level since May 2010.
"Political vacuums are rarely to be encouraged, but this one could lead to a slowdown in public spending and could raise the likelihood of an opposition victory in the next elections, and thus a less confrontational governing style," said Richard Segal, an emerging markets analyst at Jefferies in London.
'WE WILL CONQUER'
Chavez allies vowed they will continue his leftist drive, which has included nationalization of vast parts 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 said in 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 overnight 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.
"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.
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.
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.
QUESTIONS OVER RULE
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 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 by Mario Naranjo, Daniel Wallis, Deisy Buitrago, Diego Ore, Eyanir Chinea and Girish Gupta in Caracas, Carolyn Cohn in London; Editing by John O'Callaghan)
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