US Secretary of State Condoleezza Rice has criticised President Hugo Chavez of Venezuela for refusing to renew the licence of an opposition TV channel.
Some see the RCTV closure as an attack on freedom of speech
Ms Rice said the closure of Radio Caracas TV (RCTV) was "undemocratic" and called for the Organization of American States (OAS) to investigate.
Venezuela's foreign minister accused the US of meddling in its affairs.
Demonstrations against and in favour of the move have occurred almost daily in Venezuela since RCTV closed on 27 May.
The showdown between the US and Venezuela came at the OAS meeting in Panama, which was supposed to focus on environment and development issues.
"Freedom of speech, freedom of association and freedom of conscience are not a thorn in the side of government," Ms Rice told OAS officials.
"Disagreeing with your government is not unpatriotic and most certainly should not be a crime in any country, especially a democracy," she said.
'Meddling and hypocrisy'
In an angry reply, Venezuela's Foreign Minister Nicolas Maduro accused Ms Rice of "unacceptable intervention" in his nation's affairs.
He also accused the US of hypocrisy, comparing the US imprisonment of detainees at Guantanamo Bay to the activities of Nazi Germany.
Mr Chavez has said private stations such as RCTV were involved in a coup that nearly toppled him five years ago and that they have since tried to bring down his government.
His government has provided $4m (£2m) of funding for the launch of a new channel, TVES, which Mr Chavez said would better reflect society.