DEAL FINALIZED:

Spain agreed Monday to sell 12 military planes and eight patrol boats to Venezuela in a $2 billion deal that the United States has threatened to block.

The State Department repeated reservations about the sale because the planes and boats carry U.S. parts and technology, but Spanish Defense Minister Jose Bono joined Venezuelan leader Hugo Chavez in saying the sale should not concern Washington.

"Is there some rule that prohibits this sale? ... There is no international embargo," Bono said at the signing ceremony.

Spain is selling 10 C-295 transport planes and two CN-235 patrol planes, as well as four ocean patrol boats and four coast patrol vessels. It is Spain's largest-ever defense deal.

Bono said neither the boats nor transport planes were armed and that the patrol planes were only equipped for self-defense.

"This is not a warplane," he said.

Chavez also criticized Washington for trying to hold up the sale.

"Venezuela was a colony of the U.S. empire for a long time. Today we're free, and the world should know it," Chavez said, repeating his frequent criticism that in past decades the United States held sway over the oil-producing country.

"We in Venezuela don't have to be giving any explanation, much less under imperialist pressure."

Last week, the U.S. ambassador to Spain, Eduardo Aguirre, said Washington could refuse to allow U.S. technology to be transferred to Venezuela, and State Department spokesman Sean McCormack repeated concerns about the sale on Monday.

"We are currently looking at technology licensing issues," he said. "There hasn't been any final conclusion on that question yet."

Venezuelan Navy Vice Adm. Armando Laguna said the boats and planes would be delivered within seven years, and any U.S.-made parts could be replaced easily with others made in Europe.

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