BUENOS AIRES, Aug 26 (Reuters) - Colombia's FARC guerrillas insisted a handover of hostages must take place in Colombia, after Venezuelan President Hugo Chavez offered an area in his country for talks on kidnap victims, according to a newspaper interview published on Sunday.

Raul Reyes, a leader of the Revolutionary Armed Forces of Colombia, or FARC, welcomed Chavez's efforts to broker talks on freeing hostages held by the guerrillas. But he said the rebel group still demands Colombian President Alvaro Uribe pull troops from an area the size of New York City for any negotiations to begin.

The FARC has held hundreds of police, soldiers and politicians for years, including French-Colombian politician Ingrid Betancourt, snatched in 2002, and three Americans kidnapped while on a counter-narcotics mission in 2003.

The interview was published less than a week before Chavez is due to meet with Uribe in Bogota to discuss how he might facilitate the exchange of hostages for the release of jailed FARC members in Colombia's 40-year armed conflict.

"We continue seeking the demilitarization of Pradera and Florida (regions), and we would ask President Chavez to use his political weight to contribute to this, which would allow us to sit at the negotiating table and arrive at an accord to release the prisoners," Reyes told Argentine daily newspaper Clarin.

Asked if the FARC would be willing to negotiate in Venezuela, Reyes said: "Yes. We have no problem engaging in dialogue anywhere, but the handover of prisoners should be in Colombia."

Reyes also insisted that the three Americans would be released only after Washington freed two FARC commanders jailed in the United States.

Chavez, the most visible leader of resurgent leftist politics in Latin America, has promised to act as "an observer and a guarantor" of the effort to seek a hostage exchange.

U.S. officials have charged Chavez has openly aided the Marxist FARC rebels. He denies those allegations.

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