About 100,000 Cuban regular troops are also taking part in the "Bastion 2004" exercises which started Monday, officials said.

"The enemy will never catch us by surprise," the official communist party daily, Granma, trumpeted Tuesday in its coverage of the wargames which proceeded as ailing President Castro welcomed Venezuelan President Hugo Chavez, his only close ally in the Americas, whose government helps keep Cuba's energy-starved economy afloat with cut-rate oil.

"The only way to stop aggression is to make it abundantly clear that, in this case, Cuba will become from one end to the other an enormous wasp's nest that no aggressor, however powerful, will be able to overcome," Defense Minister Raul Castro said Monday.

"In the end, (the aggressor) will have to withdraw, bloodied and defeated, because this would be a war of all of the people," Castro, a younger brother of President Fidel Castro, warned.

Trucks towing armored cars and officers armed for battle were mobilized on the streets of Havana early Tuesday.

Massive underground shelters where planes, tanks and heavy artillery are housed were opened to combat troops.

The United States on Monday rejected assertions that it planned an invasion. US State Department spokesman Richard Boucher said: "We don't think there is any justification, or any particular foundation for this kind of charge."

"The United States has repeatedly called for a peaceful transition to democracy in Cuba," he added.

These "exercises are just, I would say, one or more of the many things that the Cuban government does to try to distract people from the problems that they face in their daily lives," Boucher said.

MiG-29 fighters, mobile anti-aircraft batteries, armored amphibious behicles and tanks all rumbled into action for the massive undertaking.

The Cuban military has divided the island of 11 million people into 1,400 "defense zones" intended to be able to operate independently in case of war.

Squadrons trained in guerrilla tactics have several special Cuban-made arms including "Alejandro" rifles that fire anti-tank grenades and "Mambi" rifles designed to puncture heavy armor, as well as mines and anti-tank units.

Each zone has an anti-air heat-guided missile launcher.

Raul Castro said last week the exercises had been planned in part so Washington "does not commit the errors it committed in Vietnam and that it is now committing in Iraq. So that they do not underestimate our people, who are united and more powerful than those in Iraq."

US President George W. Bush's top diplomat for Latin America has told the US Congress that Havana has a biological arms program, which Havana firmly denies.

Last month Cuban Vice President Carlos Lage said on a visit to Costa Rica "We are always prepared for the worst, even for military aggression, ... because this (US) administration is not only right-wing, it is a crazy administration -- and the war in Iraq proves it."

The communist-run island sits some 90 miles (145 kilometers) off the coast of Florida.

The Cuban and Venezuelan presidents were to have talks on Tuesday, with energy expected to be a key topic.

With its oil-burning plants, Cuba relies on Venezuelan imports while its own crude, which is high in sulfur, requires costly cleaning to be used.

Venezuela, Latin America's only OPEC member, delivers 53,000 barrels of crude a day to Cuba. It is also a major supplier to the United States.

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