RIO DE JANEIRO - The presidents of Brazil and Argentina, South America's biggest economies, announced their countries will campaign to change IMF's accounting rules to allow developing nations to invest more in job-generating projects such as roads, dams and sewers.

Brazil's President Luiz Inacio Lula da Silva and his guest, Argentine leader Néstor Kirchner, also pledged Tuesday to work together to create an economic-oriented continental bloc called the South American Community of Nations.

The two leaders signed a declaration calling for cooperation for ``economic growth with equity.''

The declaration conditions budget surpluses and other belt-tightening measures imposed by creditors to continued economic growth.

Brazil and Argentina could soften austerity measures if investments in infrastructure aren't counted against their budget deficits. These projects in Brazil usually provide thousands of jobs, from construction to engineering, activating almost all areas of the economy. The IMF has traditionally rejected that idea as incompatible with fiscal austerity.

But pressed by growing unemployment in Brazil, Lula in February launched a campaign to win over IMF members.

''We will both work like France and Germany did (after World War II) to build current Europe,'' said Brazilian Foreign Minister Celso Amorim, referring to the continental bloc plan.

Amorim implied that the two continental giants plan to mold South America into a political and economic bloc similar to the European Union.

As a first step, both nations invited members and associates of Mercosur, the trading bloc they comprise along with Uruguay, Paraguay, Bolivia and Chile, to meet within 60 days to draw up a strategy.

They didn't set a timetable for the envisioned community. But they said that both Mercosur and the Andean Nations Community -- Venezuela, Colombia, Ecuador, Peru and Bolivia -- would intensify contacts with the continental community.

If South America becomes the priority, the U.S.-sponsored Free Trade of the Americas might take a back seat.

The FTAA was originally planned to kick off in 2005.

But efforts to create the Alaska-to-Patagonia bloc have been stalled by diverse and even conflicting trade interests between the United States and its neighbors, especially Brazil.

''For Argentina, it is important to coordinate tasks with Brazil in negotiations with international lending organizations,'' said Argentine Planning Minister Alberto Fernandez. ``It is important that the budget surplus demanded of our countries takes into account national growth.''