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    UPDATE 2-Two Venezuelan opposition activists shot dead

    * Victims belonged to parties behind opposition's Capriles

    * Venezuelans transfixed by close race, fret about trouble

    * Chavez, Capriles hit streets with one week to go

    CARACAS, Sept 29 (Reuters) - Gunmen shot and killed two

    local leaders of parties backing presidential challenger

    Henrique Capriles on Saturday in the worst violence of a

    volatile campaign before Venezuela's election next weekend.

    Capriles' party, Primero Justicia (First Justice), said the

    gunmen fired from a van that witnesses identified as belonging

    to state oil company PDVSA or the local mayor's office during a

    rally in the agricultural state of Barinas.

    The government of President Hugo Chavez, who is seeking

    re-election, confirmed the deaths and vowed the perpetrators

    would be brought to justice. Interior Minister Tareck El Aissami

    said the circumstances of the attack were still under

    investigation.

    Venezuela is awash with guns, and violent crime is

    frequently cited as voters' No. 1 concern.

    There had been shootings and fistfights in previous

    opposition rallies as "Chavistas" and Capriles supporters

    clashed, but no deaths.

    "This tragedy gives us more strength and faith to fight for

    a Venezuela where justice and non-violence reign," said Primero

    Justicia, the party of one of the victims.

    Another two people were injured, and there were six arrests

    after the attack on an opposition motorcade that had been

    blocked by Chavez supporters, Primero Justicia said in an

    account not confirmed by police or other authorities.

    "I'm so sad at this bad news," Capriles said via Twitter.

    The opposition Democratic Unity coalition, which has united

    Venezuela's opposition parties, demanded a quick investigation.

    Aissami said police were doing just that. "It was an

    isolated incident," he told state TV.

    CLOSE CAMPAIGN

    On the campaign trail, Chavez showed off new infrastructure

    projects in Caracas, while Capriles accused him of wasting

    Venezuela's money on foreign allies.

    With polls inconclusive, both men are wooing undecided

    voters in what looks likely to be the tightest presidential

    election of the charismatic socialist leader's 14-year rule.

    Despite two bouts of cancer since mid-2011, Chavez, 58, has

    declared himself completely cured and is trying to recapture

    some of his old panache and energy to win a new six-year term.

    On Saturday, he inaugurated a monorail, then inspected

    extensions to the subway system, and a cable car in poor areas

    of Caracas typical of his power base.

    The projects cost a combined $2.5 billion.

    "We are not thinking about making money. That's the

    difference with capitalism," Chavez said in Petare, one of the

    largest slums in Latin America.

    "The loser will have to go to the moon and see if he can

    govern a rock there because here the bourgeoisie are never

    coming back," Chavez quipped of Capriles, whom he portrays as

    representing a heartless, right-wing elite.

    Later, in Guarenas town outside Caracas, the president drove

    through crowds in an open vehicle dubbed by some the

    "Chavez-mobile." He sang, danced and gave an exuberant speech in

    a show of energy few would have expected just months ago when he

    was publicly praying to be saved from cancer.

    Capriles, a 40-year-old state governor who has a centrist

    political vision and sees Brazil's mix of free-market economics

    and strong welfare polices as his model, has been crisscrossing

    Venezuela all year in an exhausting campaign.

    Addressing thousands in Falcon state, in west Venezuela,

    Capriles accused Chavez of making false promises to the public,

    while squandering oil revenues on foreign allies.

    "The government prefers to build a refinery in Nicaragua, or

    send oil and worry about power cuts in Cuba, but it doesn't care

    about blackouts here in Falcon," he said.

    Of the six or so best-known pollsters in Venezuela, a

    majority put Chavez ahead, but they also show Capriles creeping

    up in recent weeks, and two put him just ahead.

    Venezuelans are transfixed by the race, but also nervous of

    possible violence if the result is close and disputed.

    Foreign investors hope the more business-friendly Capriles

    will take over and end a nationalization drive and other radical

    policies that have polarized Venezuela like never before and

    made Chavez one of the world's most controversial leaders.

    Chavez promises to "deepen" socialism if he wins. That will

    likely mean continued spending on his popular welfare

    "missions," new confrontations with the private sector, and more

    support for his leftist allies in the region.

    Opposition leaders are angry at Chavez's use of state

    resources in his campaign, but say the electronic-based vote

    system should be hard to rig on election day, since they will

    have their own observers at most voting booths.

    * To follow us on Twitter: @ReutersVzla

    *(Additional reporting by Brian Ellsworth, Deisy Buitrago;

    Editing by Peter Cooney)