By Jorge Silva
QUITO (Reuters) - Ecuador broke off diplomatic ties withColombia on Monday, escalating a dispute across the Andeanregion that erupted after Colombian soldiers raided inside itssouthern neighbour to kill a guerrilla leader.
Colombia also fuelled the tensions by accusing VenezuelanPresident Hugo Chavez of funding Colombia's Marxist rebels -- acharge denied by the anti-U.S. president's government.
The three-nation crisis erupted when Colombia flew troopsinto Ecuador at the weekend in a bombing raid that killed aleading guerrilla commander of the Revolutionary Armed Forcesof Colombia, or FARC.
It was a major blow to Latin America's oldest guerrillagroup. Chavez responded by ordering troops and tanks to theborder with Colombia and he warned conservative PresidentAlvaro Uribe that a similar strike on Venezuelan soil couldlead to war.
Ecuador has also sent thousands of troops to the border andtook another step in the dispute on Monday.
"The Ecuadorean government has decided to break offdiplomatic relations," it said in a letter to Colombia'sforeign ministry.
Colombia earlier said it found documents in the FARC campinside Ecuador showing evidence that Chavez gave the rebels$300 million and that the slain commander, Raul Reyes, had tieswith an official close to Ecuadorean President Rafael Correa.
Both Venezuela and Ecuador denied the allegations.
"The government of Ecuador energetically rejects theseaccusations which cynically add to the hostile attitude shownin the recent violation of our sovereignty," Correa'sgovernment said.
Reyes had been involved in talks with Venezuela, France andEcuador to win the freedom of hostages held for years in theFARC's jungle camps. Chavez has brokered those talks, securingthe release of six captives since the start of the year.
He called the killing of Reyes a cowardly assassination.
Latin American governments, including diplomaticheavyweight Brazil, also lined up to condemn Colombia's raidand demand an explanation.
(Additional reporting by Alonos Soto in Quito, PatrickMarkey in Bogota and Raymond Colitt in Brasilia; Writing bySaul Hudson; Editing by Kieran Murray)
