In an agreement brokered by the Catholic Church, Venezuela's recently elected Constitutional Assembly agreed late Thursday to revoke an order it issued last month virtually shutting down Congress.
Under the accord, Congress will be allowed to resume its normal functions, at least until early next year, when Venezuelans are expected to vote on a new constitution and Congress.
The assembly, which is charged with writing a new constitution, stripped Congress of most of its powers two weeks ago as part of Chavez's radical campaign to clean up some of the world's worst political corruption.
The move was a climax to the assembly's moves to exert increasing control over other branches of government, which drove critics to accuse Chavez, who led a failed 1992 coup, of edging the country toward authoritarian rule.
Chavez, who won last December's presidential race in a landslide, says drastic action is needed to root out decades of corruption. The 131-member assembly, elected in July, has served as the motor for his ambitious reform plans.
Under Thursday's accord, Congress will be allowed to reconvene as a full body on Oct. 2 after its summer recess.
The political rivalry rose to a fevered pitch two weeks ago when pro- and anti-Chavez factions clashed outside Congress, and opposition lawmakers climbed over a fence to try to retake their chambers.
Critics have been alarmed by the assembly's declaration that it is the supreme power in the land. By declaring a "judicial emergency," it has given itself the right to fire judges and overhaul Venezuela's notorious judicial system.
The assembly launched a purge of the court system this week, pushing through the dismissal of eight judges and saying scores more were likely to follow.
The Supreme Court ruled in April that the assembly's sole mission is to write a new constitution. Still, it backed the assembly's declaration of the "judicial emergency," although the court's president resigned in protest.
Chavez, who remains popular with approval ratings of more than 70 percent, says an April referendum that created the assembly instructed it to reform Venezuela's troubled public institutions.
Earlier Thursday, thousands of people marched through downtown Caracas to urge the assembly not to declare an "executive emergency" that would allow it to take over state and local government and fire mayors and governors.
Shouting "Liberty! Liberty!" the protesters accused Chavez of imposing a dictatorship. The protest was led by Caracas Mayor Antonio Ledezma of the opposition Democratic Action party.
Chavez says he is generating controversy because he is attacking the interests of a corrupt oligarchy bamed for squandering the world's largest oil reserves outside the Middle East.
However, he is worried about his image overseas as a dictator-in-the-making, and has brought in a specialist in international news to offer advice.
The assembly is sending a four-person team to New York and Washington next week to meet with political and business leaders to try to counter what they say is the international media's sensationalistic depiction of Chavez as a dictator.