LIMA - Biofuels and free trade divided European and Latin American leaders at a summit meeting in Peru Friday as they sought to tackle soaring food prices and global warming.

Leftist Bolivian President Evo Morales said he feared the poor could suffer as his regional counterparts rush to sign free-trade deals with Europe, and others warned of a looming food emergency across the world.

"Soon, if the crisis deepens, hundreds of millions of people will be threatened by hunger," Peruvian President Alan Garcia, who has denounced biofuels, told the fifth gathering of heads of state from Europe, Latin America and the Caribbean.

The European Union and Brazil, the world's top ethanol exporter, support so-called greener fuels, but many Latin American countries blame them for pushing up food prices and causing hunger in a region where a third of the population lives in poverty.

Critics say the EU should scrap its target of having biofuels make up 10 percent of road transport fuels by 2020, claiming the goal will contribute to hunger and environmental damage around the word.

European leaders played down the risks.

"The impact of biofuels (on food prices) should not provoke such alarm, because from my point of view the relationship isn't that clear," Spanish Prime Minister Jose Luis Rodriquez Zapatero told reporters.

Even as many poor nations in Latin America criticize using food crops such as corn and soybeans to brew renewable fuels, they are increasingly worried about climate change and say rich states must cut carbon emissions.

Peru created an environment ministry this week to help cope with the impact of rising global temperatures, which studies show could melt its Andean glaciers within 25 years.

While there was broader support for initiatives to combat global warming, including carbon trading programs and reforestation, leaders struggled to agree about trade.

DIVISIONS

Proponents say opening up borders would lower food prices by removing tariffs, but skeptics say trade pacts could hurt food production by slashing subsidies.

The issue has exposed ideological disagreements between Peru and Colombia, both free-trade enthusiasts, and leftist leaders like Bolivia's Morales, a former coca grower who says trade deals could hurt peasant farmers.

Peru and Colombia called on Friday for their countries to be put on a "fast track" in trade talks between the EU and Andean countries.

"If Ecuador and Bolivia say we need more flexible time frames, we're not in the business of denying them that. But they can't throw obstacles in the way of our negotiations," Colombian President Alvaro Uribe said.

Europe is keen to boost trade with Latin America, where Asian countries have invested billions in natural resources.

"The lack of trade between the European Union and Latin America is nothing less than criminal," Britain's junior Foreign Office minister Kim Howells told Peruvian television.

Despite the policy rifts at the summit, some leaders seemed to patch over their differences.

A smiling German Chancellor Angela Merkel shook hands with Venezuela's firebrand leftist President Hugo Chavez, only days after he called her a political descendant of Adolf Hitler for implying that he had damaged relations between Europe and Latin America.

"I haven't come here to fight. I was pleased to shake hands with the German chancellor," Chavez told Peru's state news agency Andina. "I told her that I was sorry if I'd been harsh."

Chavez often insults conservative leaders, and especially likes to target President Bush. At a summit in Chile last year, Spain's king told him to "shut up."

Chavez said Thursday he might cut off diplomatic relations with Colombia, the closest ally of the United States in Latin America.

Both Chavez and and Ecuadorean President Rafael Correa, a leftist ally, have been locked in a dispute with the conservative government of Colombian President Alvaro Uribe since March.

Ecuador severed ties with Colombia after its army raided a Colombian guerrilla camp in Ecuadorean territory on March 1, and Correa accused Colombia of launching a smear campaign linking him and Chavez to the leftist rebel group FARC.

"So long as it behaves like this, it's impossible to have a good relationship," Correa told Reuters.

(Additional reporting by Terry Wade, Helen Popper, Marco Aquino, Silene Ramirez and Ricardo Serra; Editing by Kieran Murray)