Venezuela has withdrawn its ambassador to Panama, a day after Cuba broke off diplomatic relations with Panama over a pardon for four Cuban exiles.
Moscoso offended Venezuela with her remarks
The men had been accused of attempting to assassinate Cuban President Fidel Castro four years ago.
Venezuelan Ambassador Flavio Granados said he was being withdrawn "because of the offensive statements" made by Panama's President Mireya Moscoso.
She pardoned the four a few days before leaving office at the end of August.
One of the four Cubans is wanted in Venezuela on charges relating to the hijacking of a passenger plane in 1976.
Ms Moscoso said had pardoned them for "humanitarian reasons", because "if they stay (in Panama), they might be extradited to Venezuela or Cuba, where I am sure they would have killed them".
Mr Granados said he and his government "categorically
reject and repudiate those statements", adding that Venezuela did not have the death penalty.
However, he added that the two countries would maintain diplomatic relations.
"With the arrival of the new government in Panama, we are
sure our ambassador will return there," said Venezuelan Deputy Foreign Minister Arevalo Mendez.
The incoming Panamanian leader, Martin Torrijos, has publicly opposed the pardons. He takes office next Wednesday.
Venezuela's President Hugo Chavez had been due to attend his inauguration, but has now said he will no longer be coming.
The four men - all Cuban emigres - were convicted and jailed in April for threatening public security and falsifying documents.
Luis Posada Carriles, Gaspar Jimenez, Guillermo Novo and Pedro Remon were on a list of presidential pardons announced by Ms Moscoso.
Cuba has wanted dissident Luis Posada Carriles for years
At a summit in Panama in November 2000, Mr Castro alleged there was a plot to kill him.
Explosives were found in a case, but the anti-Castro activists denied plotting to kill the Cuban leader.
The defendants said they were in Panama to help a Cuban general who had supposedly planned to seek political asylum.
Mr Posada Carriles is a former CIA operative who has long sought the overthrow of Fidel Castro.
In 1985, he escaped from a Venezuelan prison whilst awaiting trial for his alleged involvement in a 1976 bombing of a Cuban passenger plane, which killed 73 people.
The four men arrived in Honduras on Thursday, and Mr Jimenez, Mr Novo and Mr Remon have already continued to Miami.