UPDATE 1-South American leaders rally behind Argentina over debt
(Adds official communique paragraphs 14-15)
By Diego Ore and Deisy Buitrago
CARACAS, July 29 (Reuters) - South American leaders have rallied behind Argentine President Cristina Fernandez, who is locked in a legal battle with holdout investors that could trigger a debt default this week.
The standoff figured prominently at the Mercosur bloc's meeting in Caracas on Tuesday, with heads of state castigating the holdouts as speculators menacing the entire region.
Argentina has until late Wednesday to either pay out or reach a deal with the hedge funds that are suing for full payment on their bonds to avert a second default in little over a decade in Latin America's No. 3 economy.
While Fernandez was in Venezuela on Tuesday, Argentine debt negotiators met in New York with a court-appointed mediator for last-gasp negotiations to cut a deal.
"We have ratified all our militant solidarity with the Republic of Argentina, with the struggle the president is leading against the attempt, through so-called vulture funds, to cause damage via financial speculation," Venezuela President Nicolas Maduro told the forum.
"It's not just damage to Argentina. It's damage to all the countries of the south," added the socialist Maduro, who replaced Hugo Chavez after his death from cancer last year. Continuación...