President Hugo Chavez froze relations with Colombia after its president ended the Venezuelan leader's role mediating with leftist rebels in the neighbouring country.
The move comes after Chavez also halted dealingswith Spain following an incident in whichKing Juan Carlos publicly told Chavez to shut up.
Chavez said economic relations will be hurt, blaming actions by Colombia's U.S.-allied President Alvaro Uribe that he said were "a spit in the face."
"I declare before the world that I'm putting relations with Colombia in the freezer because I've completely lost confidence with everyone in the Colombian government," Chavez said during a televised speech.
Addressing cabinet ministers and military officials, Chavez said: "Everyone should be alert in relation to Colombia— economic relations— the businesses Colombians have here and the businesses we have there. Commercial relations, all of that is going to be harmed. It's lamentable."
Chavez was responding to Uribe's decision to cancel his mediation with Colombian rebels, preliminary talks aimed at a prisoner swap that would free rebel-held hostages, including three Americans. Uribe's spokesman said Chavez had defied the Colombian president by directly contacting his army chief to discuss the issue.
The Venezuelan leader said a statement issued by Uribe's government giving its reasons for ending his mediation was "filled with lies."
"I really, truly believe that the Colombian government doesn't want peace," Chavez said.
Chavez said he was particularly irked that Uribe had his officials issue statements instead of contacting the Venezuelan leader directly.
"Why don't do you show your face?" Chavez said. "President Uribe is lying— in a shameless, horrible, ugly way. I think Colombia deserves another president, it deserves a better president."
Chavez in August joined Colombian lawmakers in a new push to free hostages held by the Revolutionary Armed Forces of Colombia, better known as FARC. Prisoners include three U.S. military contractors and Ingrid Betancourt, a French-Colombian seized in 2002 while campaigning for Colombia's presidency.
The two South American countries are major trading partners, and the spat with Colombia comes amid another dispute with Spain that could affect Spanish businesses with major investments in Venezuela. Chavez has demanded Spanish King Juan Carlos apologize for publicly telling him to shut up during a recent summit in Chile.
Chavez said the situation with Colombia is similar.
"It's like the case of Spain: Until the king of Spain apologizes, I'm freezing relations with Spain," he said.
Chavez and Uribe are polar opposites politically.
Since taking office in 2002, the conservative Uribe has fought to crush Colombia's peasant-based rebel army with $4 billion in U.S. military aid.
The socialist Chavez has meanwhile railed against U.S. involvement in the region and called for Uribe to negotiate peace with Colombian guerrillas.