CARACAS (Reuters) - A Venezuelan community group will dedicate a public square in Caracas to the ex-leader of Colombia's largest guerrilla movement Friday in a move that has upset the Colombian government.

Colombia has accused Venezuelan President Hugo Chavez of backing the FARC guerrillas, helping spark a diplomatic fight earlier this year that briefly interrupted trade relations vital to both countries.

Chavez denies Colombia's charges but he has pressed the United States and the European Union to stop labeling the FARC a terrorist group.

A bust of former FARC leader Manuel Marulanda, who died of a heart attack in March, will go on display in a small plaza in the Venezuelan capital.

Marulanda, who was nicknamed "Sureshot", is seen by some Latin American leftists as a hero for his decades of guerrilla warfare but he is widely reviled in Colombia's population for his involvement in drug trafficking, kidnapping and extortion.

"Whether people like it or not, Manuel Marulanda became an important personality for Latin America," said Juan Contreras of the neighborhood group Coordinadora Simon Bolivar, which is led by radical Chavez supporters.

Diplomatic sources in Colombia said the move has angered the conservative government of President Alvaro Uribe and that it will ask Venezuela to take an official stance on the issue.

Venezuela's government had no immediate comment Friday.

The FARC, or Revolutionary Armed Forces of Colombia, said on its Web site that the plaza was a "deserved tribute to a true marshal of revolutionary guerrilla war."

Walls nears the bust include decorations such as a mural of Marulanda inscribed with the words "to die is to live" and slogans celebrating the late Raul Reyes, a top FARC commander killed in a Colombian cross-border raid on Ecuador in March.

That attack led Chavez to send troops to the Colombian border, sparking the Andes' worst diplomatic crisis in a decade. Chavez and Uribe, a staunch U.S. ally, have since worked to lower tensions and boost commercial relations. (Additional reporting by Luis Jaime Acosta in Bogota and Jorge Silva in Caracas; Editing by Kieran Murray) (Reporting by Patricia Rondon Espin in Brian Ellsworth)