MAR DEL PLATA, Argentina (AP) – Anti-American demonstrators marred yesterday’s red carpet inaugural of the Summit of the Americas, clashing with riot police on a day in which 10,000 protesters marched peacefully to bury a plan to create one of the world’s largest free trade zones.

About 1,000 masked demonstrators set American flags on fire, smashed storefronts and torched a bank. The rioting came as leaders from across the hemisphere began two days of meetings on free trade, job creation and democratisation programmes.

Billowing tear gas sent elderly residents and other panicked pedestrians fleeing a main shopping boulevard 1 mile (1.6 kilometres) from the summit site where leaders of 34 nations were guarded behind barricades enforced by 8,000 police and soldiers.

Tear gas clouded the boulevard as rioters set fire to debris in the middle of a wide city avenue, using it as a barrier while throwing rocks at police. Car sirens wailed as police fought back from behind iron barricades against what appeared to be an attempt by the demonstrators to break through.

Demonstrators lit American flags on fire and several young demonstrators fired slingshots and threw sharpened sticks toward the police line. Several shops, including a minimarket, a cellular phone store and a pastry shop, had their windows shattered during the rioting as firefighters responded to a fire at a bank.

After firefighters and police arrived at the bank, a battle between rioters and police broke out a few blocks away.

Ramon Madrid, a hotel manager, hurriedly closed up, saying he never had seen such violence in the bucolic seaside resort, Argentina’s favoured vacation spot.

“I don’t like Bush but this is too much. There is no need for violence,” Madrid said.

Earlier in the day, Venezuelan President Hugo Chavez urged a peaceful crowd of demonstrators – including soccer great Diego Maradona and Bolivian presidential hopeful Evo Morales – to help him block efforts to relaunch talks for a Free Trade Area of the Americas.

“Only united can we defeat imperialism and bring our people a better life,” Chavez said, speaking before a six-storey banner of revolutionary Ernesto “Che” Guevara. “Here, in Mar del Plata, FTAA will be buried,” he said.

Despite Chavez’s opposition, Mexican President Vicente Fox, one of the region’s strongest free trade advocates, said 29 of the 34 nations participating in the summit were considering forging ahead with FTAA – without the participation of dissenting countries like Venezuela, Brazil, Argentina, Paraguay and Uruguay.

The rioting came as smiling leaders met in an elegant seaside hotel amid drum rolls and blaring trumpets. US President George W Bush, the focus of protest ire here, was present along with first lady Laura Bush, Chavez and more than 30 other leaders.

Top-level negotiators at the summit have so far failed to agree on key language aimed at relaunching talks as soon as April for the proposed bloc stretching from Alaska to Argentina – an ambitious proposal originally raised in 1994 at the first Americas summit in Miami.