MAR DEL PLATA, Argentina (Reuters) - Leaders from around the Americas failed on Saturday to resolve key differences over how to create a hemisphere-wide free trade zone during a regional summit overshadowed by violent anti-U.S. protests.
Talks on creating the U.S.-proposed Free Trade Area of the Americas, or FTAA, have been stalled for the last two years, and the Bush administration had hoped to jump-start discussions to establish the world's most populous free-trade bloc.
But Chilean President Ricardo Lagos said differing views over how to proceed persisted as the two-day Summit of the Americas ended in this Argentine seaside resort.
"The point of contention is if the conditions are there for us to negotiate. A great majority said 'Yes' but others said 'Let's wait,"' he said.
The United States, Mexico and some other countries had been hoping to set an April date to move the trade talks forward, a move opposed by Argentina, Brazil, Paraguay, Uruguay and Venezuela.
The Bush administration insists a regional free-trade agreement stretching from Canada to Argentina would give new markets to American businesses and help create jobs and greater prosperity in Latin America.
U.S. officials say 29 of the 34 countries represented in the talks are behind the proposal.
But Venezuelan President Hugo Chavez, the region's most ardent free trade critic, has criticized the plan, calling it detrimental to Latin American workers. He came to the meeting vowing to "bury" efforts to move FTAA forward and rallied 25,000 anti-free trade protesters on Friday.
On Saturday, calm returned to the streets of Mar del Plata, where a separate anti-U.S. demonstration had turned violent blocks from where Bush and the 33 other leaders were meeting.
Some 200 protesters battled riot police after torching a bank and shattering store windows along a major boulevard. Officials said 64 people were arrested but no major injuries were reported.
U.S. national security adviser Stephen Hadley told reporters aboard Air Force One, traveling with Bush en route to Brazil, that although no accord was reached, progress was still made in the bid to create a free-trade zone.
'ENHANCED TRADE'
"It's not deadlocked," Hadley said. "We went from a summit which was supposed to bury FTAA to a summit ... in which all 34 countries actually talk in terms of enhanced trade and an FTAA."
He said Bush listened as well as expressed the U.S. view.
"His approach is to not to try and dominate but to participate as one of equals and listen, and that's what he did," Hadley said. "At critical times he made his views obviously clear."
A final declaration, which came hours after a scheduled deadline, reflected the division, with dissenting countries calling for any future talks to begin after a World Trade Organization meeting in Hong Kong in December.
Although not outrightly opposed to FTAA like Chavez, leaders from Latin America's big agricultural economies Brazil and Argentina have also voiced concern over any free trade deal, saying they would first like to see an end to U.S. farm subsidies.
"Free trade is very important if we respect equality among nations," Brazilian President Luiz Inacio Lula da Silva told reporters. He added it was "not opportune" to discuss FTAA before the crucial World Trade Organization (WTO) meeting next month, where subsidies would be a key issue.
Bush's stop in Brazil is the second part of a Latin American trip that will also include a stop in Panama.
Ahead of his arrival, police in Sao Paulo fired tear gas and used batons to disperse a crowd of about 1,000 people protesting in the city center against Bush's visit.
The march began peacefully with protesters shouting "Go home Bush!" but police responded after some protesters began throwing rocks.
In comments to reporters in Mar del Plata, Lagos suggested that talks between regional leaders had at times been tense.
"Something happened here that rarely happened in other meetings: the call to speak out loud was taken up by everyone," Lagos said. "At times, we all talked out loud, perhaps too loud, but it made the meeting that much more interesting."
(Additional reporting by Paulina Modiano, Steve Holland, Tabassum Zakaria, Guido Nejamkis and Cesar Illiano in Mar del Plata)
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