Russia's deepening strategic partnership with Venezuela took a dramatic step forward yesterday when it emerged that Moscow has agreed to build Venezuela's first ever nuclear reactor.

President Dmitry Medvedev is expected to sign a nuclear cooperation agreement with his Venezuelan counterpart, Hugo Chávez, during a visit to Latin America next week, part of a determined Russian push into the region.

The reactor is to be named after Humberto Fernandez Moran, a late Venezuelan research scientist and former science minister, Chávez has announced. It is one of many accords he hopes to sign while hosting Medvedev in Caracas next week.

The prospect of a nuclear deal between Moscow and Caracas, following a surge in Russian economic, military, political and intelligence activity in Latin America, is likely to alarm the US and present an early challenge to the Obama administration.

"Hugo Chávez joins the nuclear club," Russian's Vedomosti newspaper trumpeted yesterday.

Venezuela's socialist leader said the reactor may be based in the eastern state of Zulia. He stressed that the project would be for peaceful purposes. As if to underline that point, four Japanese survivors from the Hiroshima and Nagasaki bombs visited Venezuela this week at the government's invitation.

The energy ministry, which is scouting locations, said the project was at a very early stage. A report which mooted a nuclear reactor long before Chávez came to power has been dusted off.

Despite abundant oil reserves, Venezuela's energy infrastructure is creaking and prone to blackouts. A nuclear reactor would enable the country to utilise its rich uranium deposits and allay criticism that the government has neglected energy investment.

More importantly for Moscow and Caracas, a nuclear deal will showcase a partnership which advocates creating new "poles" of power to check American hegemony.

Nick Day, a Latin American specialist, said the nuclear deal was deliberately timed to pile pressure on the US administration during a moment of transition and weakness.

"Russia is manoeuvring hard in the time between Obama's election and his inauguration. What the Russians are trying to do is to set up a chessboard that gives them greater mobility in negotiations when he [Obama] comes to power," Day said.

He added: "Russia's message is: 'We can exert influence in your backyard if you continue to exert influence in our backyard. If you don't take your missiles out of Poland and end Nato expansion we're going to increase our influence in Latin America and do things to provoke you.'"

According to Sergei Novikov, spokesman for Russia's federal nuclear agency, no reactor can be built until both countries have signed a preliminary agreement on nuclear cooperation. This will be signed next week, Novikov told Vedomosti.

Both presidents are also expected to firm up details of a Russian-Venezuelan energy consortium to jointly produce and sell oil and gas.

Russian companies which are already exploring oilfields in Venezuela could then extend their reach to fields in Ecuador and Bolivia.

Venezuela has bought $4bn of Russian arms, including Sukhoi fighter jets, making it one of Moscow's best clients. Chávez has spoken of also buying Project 636 diesel submarines, Mi-28 combat helicopters, T72 tanks and air-defence systems.

Despite the spending spree, Venezuela's military has not tipped the regional balance of power.

Chávez's armed forces lag behind that of Brazil, Chile and Colombia and analysts question Venezuelan effectiveness.

For Russia's president, however, Caracas is a valuable springboard into Latin America. In addition to Venezuela Medvedev will visit Peru, Brazil and Cuba - the first trip by a Russian leader to Havana in eight years.

Moscow has spoken of reviving Soviet-era intelligence cooperation with the communist island and in a sign of dramatically improved ties, President Raul Castro last month attended the opening of a Russian Orthodox cathedral in Havana.