By Saul Hudson and Alonso Soto
CARACAS/QUITO (Reuters) - Leftist allies Venezuela andEcuador escalated a crisis with Colombia on Monday, cuttingdiplomatic ties after their neighbor raided inside Ecuador inan attack that sparked troop deployments and warnings of war.
Colombia also fueled the tensions by accusing VenezuelanPresident Hugo Chavez of funding Marxist rebels in its country-- a charge denied by the anti-U.S. president's government.
The crisis erupted when Colombia flew troops into Ecuadoron Saturday in a bombing raid that killed a senior rebel of theRevolutionary Armed Forces of Colombia, or FARC.
It was a major blow to Latin America's oldest rebel groupand also eliminated a key contact for governments, such asFrance, Venezuela and Ecuador, in talks to free hostages heldby FARC for years in jungle camps.
Chavez has brokered the release of six captives since thestart of the year in those negotiations.
On Monday, Venezuela and Ecuador said they had been closeto securing freedom for the most high-profile hostage,French-Colombian Ingrid Betancourt.
"The hand of authoritarian war-mongers wrecked everything,"Ecuadorean President Rafael Correa said on the eve of a LatinAmerican tour -- including Venezuela -- to lobby for support.
"We have always declared peace with Colombia, we havestretched out a hand of solidarity and we have been betrayed,"he said in an address to the nation.
Latin American governments, including diplomaticheavyweight Brazil, lined up to condemn Colombia's attack anddemand an apology for Ecuador.
Governments from France to the United States, as well asU.S. presidential candidates, also urged diplomacy to defusethe tensions.
Chavez ordered troops and tanks to the border with Colombiaon Sunday and warned conservative President Alvaro Uribe, astaunch U.S. ally, that a similar strike on Venezuelan soilcould lead to war. His foreign minister said Venezuelasuspected Washington helped coordinate the Ecuador attack.
Ecuador also sent thousands of troops to the border.
Both leftist governments intensified their diplomaticmeasures against Colombia on Monday.
Ecuador announced it was cutting off diplomatic ties andVenezuela expelled all Colombian diplomats, a day after itwithdrew all its own personnel from its embassy in Bogota.
COUNTER-ACCUSATIONS
Colombia's police chief said documents were found in theraid in Ecuador showing that Chavez gave the FARC $300 million.Venezuela denied the charge and said it had its own evidencethat the police chief was a drug-trafficker.
Colombia also linked the slain commander, Raul Reyes, withan official close to Ecuador's President Rafael Correa.
"The government of Ecuador energetically rejects theseaccusations which cynically add to the hostile attitude shownin the recent violation of our sovereignty," Ecuador'sgovernment said.
Other governments criticized Colombia for sending troopsinto Ecuador.
"The territorial violation is very serious and needs to becondemned," Brazilian Foreign Minister Celso Amorim said."Brazil condemns any territorial violation."
Traffic was normal at main border crossing points betweenVenezuela and Colombia, and while Venezuela said it reinforcedthe borders, there was no sign of a mass mobilization.
Despite the three leaders' brinkmanship and the risk ofmilitary missteps, political analysts said a conflict wasunlikely on borders that stretch from parched desert throughAndean mountains and jungles to the Pacific Ocean.
Chavez, the leader of a growing bloc of Latin Americanleftist leaders, may win points with supporters by challengingUribe. But experts say he can ill afford to lose food importsfrom Colombia just as he tries to combat chronic food shortagesin his OPEC nation.
(Additional reporting by Patrick Markey in Bogota andRaymond Colitt in Brasilia; Writing by Saul Hudson; Editing byKieran Murray)