Nov 25 (Reuters) - Cash-strapped Venezuela settled a $1.2 billion arbitration claim that will protect its crown jewel foreign asset, the Houston-based Citgo Petroleum Corp refining business, from being stripped away by a creditor, according to Canadian court documents.

The deal with Crystallex International Corp suspends the Canadian mining company's push for a court-ordered auction of control of Citgo as a way of collecting on an arbitration award against Venezuela that has grown to more than $1.4 billion with interest. (Reporting by Tom Hals in Wilmington, Delaware; Editing by David Gregorio)