THE Venezuelan President Hugo Chavez has accused the US of preparing to invade Libya to steal its oil.

‘A campaign of lies is being spun together regarding Libya,’ said Chavez, in a televised speech to a crowd of graduates who had just received diplomas from state universities.

‘I’m not going to condemn him,’ he said. ‘I’d be a coward to condemn someone who has been my friend.

‘The United States has already said it’s ready to invade Libya, don’t you see?

‘And almost all the countries of Europe are condemning Libya . . . What do they want. They are rubbing their hands together.

‘Oil is what’s important to them,’ he said.

Chavez condemned the US for moving naval and air forces closer to Libya.

Venezuela and Libya are both major oil exporters.

Prime Minister Cameron warned yesterday that he’s discussing with ‘world leaders’ the imposition of a ‘no-fly zone’ over Libya, as well as the arming of ‘rebel leaders’.

In an ‘emergency statement’ to MPs, Cameron said the aim of his government is to persuade ‘those on the fringes of the regime’ to cut their ties with Gadaffi by imposing travel bans and freezing assets.

He told parliament: ‘We do not in any way rule out the use of military assets.

‘We must not tolerate this regime using military force against its own people.’

Cameron said: ‘I have asked the ministry of defence and the chief of the defence staff to work with our allies on plans for a military no-fly zone.’

He added: ‘Of course we must comply with international law, but my argument is that we need to do the preparation and the planning now because no one can be sure what Colonel Gadaffi will do to his own people.’

Cameron said the ‘international community’ could not tolerate the ‘illegitimate regime’.

Pressed by a Tory MP on whether the Libyan opposition could be supplied with weapons, Cameron replied: ‘It’s certainly something we should be considering.’

New EU sanctions were rubber-stamped during emergency meetings in Brussels yesterday, following the UN Security Council’s weekend approval of a raft of measures against Libya.

In a series of interviews, US Ambassador to the UN Susan Rice said her goal was to ‘weaken’ Colonel Gadaffi’s hold on power.

She said ‘all options’ are under consideration, including the imposition of a no-fly zone.