By Daniel Wallis and Andrew Cawthorne
CARACAS (Reuters) - Venezuelans poured over the latest video of President Hugo Chavez for clues to his health on Thursday after the scrapping of a regional summit he had been due to host kept the guessing game going.
Analysts say his prolonged absence since undergoing surgery on June 10 at a Havana hospital is fueling tensions between factions within his ruling Socialist Party, though it is unclear whether his opponents can capitalize on the situation.
The saga over the 56-year-old socialist leader's condition has captured the attention of Latin American governments and convulsed politics in the already turbulent nation he has led since 1999.
"Uncertainty is now intensifying in Venezuela," said Diego Moya-Ocampos, a Venezuelan analyst at IHS Global Insight.
"A prolonged absence by Chavez could encourage a likely political crisis of unprecedented levels."
Hours after releasing new video on Wednesday of Chavez with Cuba's Fidel Castro aimed at stopping speculation that he is seriously ill, Venezuela canceled a July 5-6 regional summit coinciding with its 200th anniversary of independence.
That was a heavy blow for supporters who wanted the charismatic but authoritarian president -- well-known for grandstanding at such big events -- back home in time for the national party.
Inheriting Castro's mantle as Washington's main irritant in Latin America, Chavez has become one of the world's most recognizable leaders during his 12 years in power.
The official line remains that he is recovering well from an operation to remove a pelvic abscess and will be home soon.
But the unusual silence from the normally garrulous president has prompted rumors he might have something worse, maybe prostate cancer. It has also underlined the lack of any clear successor who could take the reins of the OPEC member.
Given past violence, especially around a short-lived coup against Chavez in 2002, the potential for more bloodshed always lurks in a heavily-armed nation mired in political bitterness.
BOTH SIDES STUDY VIDEO
The lack of details have left supporters and opponents scouring the new video, in which Chavez is seen walking with his mentor Castro, as well as sitting chatting about history.
Supporters latched onto the fact the president sounded fine and looked better -- albeit thinner than usual -- compared to the one set of photos released a week after his operation.
"President Chavez is alive and well, despite media myths and lies," said Eva Golinger, a U.S. lawyer close to the president.
One opposition-leaning news website pointed out that a wheelchair could be seen in the background at points in the video, suggesting Chavez used it during parts of meeting not on camera.
"The video seems aimed more at Chavismo than the rest of the world, sort of sending the message he is still around, don't stir the pot and follow the party line or else," one blogger wrote.
Some die-hard opponents of Chavez have even suggested the whole thing might have been concocted using computer graphics and old footage -- despite both men clearly filmed reading articles from Tuesday's edition of the Cuban Communist Party's newspaper Granma.
The new images left major questions unanswered, perhaps the most pressing being: if he is well enough to chat at length with Castro, why has he still not addressed the nation?
The saga caught the attention of Wall Street, where Venezuela's widely traded debt rallied again on Thursday on the prospects of Chavez's illness leading to political change and a more market-friendly leadership arising in elections next year.
Venezuela's benchmark dollar-denominated 2027 global bond rose 1.500 points in price to bid 75.000 with a yield of 12.976. That followed a 2.8 percent rally on Monday.
Since Monday, local analysts say some in the market appear to have decided a weakened Chavez is better than no Chavez at all -- which would imply a power vacuum and the potential for chaos.
A program by the government to repurchase their bonds and ones issued by state oil company PDVSA may also be supporting prices.
(Reporting by Daniel Wallis and Andrew Cawthorne; Editing by Anthony Boadle)