Venezuela's President, Nicolas Maduro, has broken diplomatic relations and frozen economic ties with Panama.
The decision comes after the Central American nation requested a meeting at the Organization of American States (OAS) to discuss Venezuela's crisis.
Mr Maduro was speaking to other Latin American heads of state at events to mark the first anniversary of the death of the Venezualan leader Hugo Chavez.
At least 18 people have died in anti-government protests in the last month.
"I've decided to break political and diplomatic ties with the current government of Panama and freeze all trade and economic relations from this moment on," Mr Maduro told the presidents of Cuba, Raul Castro, Uruguay, Jose Mujica, and Bolivia, Evo Morales, among other leaders gathered around the tomb of Mr Chavez.
'Conspiracy'
Panama's President Ricardo Martinelli expressed surprise at Venezuela's decision.
"Panama only hopes that this brother nation finds peace and strengthens its democracy," Mr Martinelli wrote on Twitter.
Panama's official statement said the country was "astonished" and called Mr Maduro's words "unacceptable".
"The measure announced by President Maduro should not become a smoke screen intended to hide reality," it read.
Continue reading the main story
At the scene
image of Irene Caselli Irene Caselli BBC News, Caracas
It has been a day of celebrations - but also protests.
On the one side of the capital, supporters of the government wore red during a military parade. They also gathered around the hilltop military headquarters where Hugo Chavez's remains lie.
The Cuartel de la Montana had a great significance for Chavez. That is where he led the 1992 coup that launched his political career.
At 16:25 local time, the whole of Caracas resounded with cannon fire and fireworks to mark the exact time of Mr Chavez's death.
On the other side of the city, protesters remained in the streets, vowing not to leave until President Nicolas Maduro resigns.
Barricades blocked several streets. As cannon fire resounded, banging of pots and pans could be heard in the eastern part of the city, an anti-government stronghold where protests have turned violent every night.
Earlier, thousands of government supporters and troops took part in a huge parade through central Caracas, commemorating the first anniversary of former President Chavez's death.
In other parts of the capital, anti-government protesters kept up their barricades, despite an appeal made by opposition leaders to "respect" the anniversary.
Last week, the government of Panama requested an urgent meeting of OAS member-states to discuss the unrest in Venezuela.
Venezuelans have long been complaining about high levels of crime, record inflation and shortages of some staple items.
But in the last three weeks marches initially started by disgruntled students in the western states of Tachira and Merida spread to other areas and gained support.
On Wednesday, the OAS said a meeting would take place the next day behind closed doors to decide whether or not to convene the region's foreign ministers over the issue.
Mr Maduro accused the Panamanian government of conspiring to bring down his government.
"There are moves by the United States government in accord with a lackey government of a right-wing president which has been creating the conditions for the OAS and other bodies to step towards an intervention in our country," Mr Maduro said.
The Venezuelan president also criticised OAS President Jose Miguel Insulza, who had suggested earlier that a group of observers could be sent to Venezuela – if its government and the opposition found it useful.
- Panamas President Martinelli was surprised
Panama's President Martinelli said he was surprised by Mr Maduro's decision to break ties
"Don't intervene in Venezuelan home affairs," was Mr Maduro's message to Mr Insulza.
http://www.bbc.com/news/world-latin-america-26461530
So is Maduros voice in our homeland made as confused as you can do it. Lets us see what kind of democracy Maduros want to take care of? You all remember well that Ombama from US- wanted to teach Gadaffi to death by US democrazy and bullets. Lets hope Libya will raise again and throw away Obamas dollars, and start to pay tension to theire own gold money- as Gadaffi was started to produce. Gadaffi had a well -function democracy- much better than Obama have in his own stove, in the dark house of US.
Comment BmOnline:
Do this people really know any about real democracy?
Do you think the former precident know it?
The real democracy is the free will of the people, not from crazy ideas of political riots. I know, because in Norway the political riots of Norway clames we have the best contry in the world to live in, but the truth is, we are among the worserst, because of the dirty lies of the politicians in Norway- who runs the devels plan, the mulitcult plan (alles paletti) straight foreward to hell. The New World Order, in-stead of a loving home and caring parents to all of us.
Do not let you fool down by this crime people in white ties. The globaization is really one big organized crime to all consern.
http://www.bbc.com/news/world-latin-america-25496906
http://abovethelaw.com/2013/12/4-ways-t ... ense-work/
BmOnline
