Peru has withdrawn its ambassador to Caracas for consultations, in a protest against what it considers interference by Venezuela in its election campaign.
On Tuesday, President Hugo Chavez backed the nationalist Peruvian candidate, Ollanta Humala, saying he shared the battle against free trade.
It is the latest row between Mr Chavez and his neighbours in the region.
Mr Humala, an ex-military man who led a rebellion in 2000, is winning growing support ahead of Peru's April election.
Condemnation
Mr Humala was invited to Caracas earlier this week to meet the Venezuelan leader and attend a news conference which was also attended by Bolivia's President-elect Evo Morales.
Mr Humala said he was visiting Venezuela, along with other Latin American nations, to discuss "economic, political and social integration".
"It's the beginning of an international agenda," he said.
President Chavez praised him for "joining the battle" against the Free Trade Area of the Americas backed by Washington and a number of countries in the region.
He also said a failed military uprising led by Mr Humala was worthy of Don Quixote.
The condemnation in Peru was swift. Politicians and some sectors of the media denounced Venezuelan interference and accused Mr Humala of being a protege of President Chavez.
Withdrawing Ambassador Carlos Urrutia, the government in Lima said the Venezuelan president had broken diplomatic norms in the region.
Correspondents say the move reveals growing concern among some Peruvians that their country could be heading down the same path as Venezuela - partly, they think, because President Chavez wants to spread his ideology across Latin America.
Last year, Bolivia accused Venezuela of interfering after one of its diplomats compared the Bolivian right-wing candidate, Jorge Quiroga, to Pontius Pilate.
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