Latin America's Mercosur regional pact extended Paraguay's suspension from its ranks to April 2013 in a move set to divide the region and exacerbate tensions.

Analysts said the decision to keep the landlocked agrarian country out of Mercosur was widely expected.

Argentina, Brazil and Uruguay are increasingly seen to be locked into a position they adopted when spearheading Paraguay's suspension last June over the impeachment and removal of former President Fernando Lugo. In recent months the countries made amends to Paraguay by returning ambassadors to Asuncion but Paraguayans predictably rejected the overtures.

Lugo was replaced by his vice president, Federico Franco, after a Senate vote. The change was condemned by Mercosur as a coup, a position backed by another regional group, the Union of South American States.

Both Mercosur and Unasur are arrayed against the Organization of American States, which doesn't agree with their version of events and sees Franco as a legitimate interim head of state.

The split is rooted in ideological divisions between left-wing and liberal governments and conservative governments drawing support from the OAS, which has headquarters in Washington.

At the same time they were suspending Paraguay, Argentina, Brazil and Uruguay confirmed Venezuela's membership, which was being held up by congressional opposition in Paraguay.

The manner in which Venezuela was accepted into Mercosur as a full member caused further bitterness in Paraguay, which wants Venezuela's membership rescinded and reconsidered according to Mercosur rules.

As a result the ideological battle lines are becoming more pronounced, with little chance of an early breakthrough. Disagreements with OAS over Paraguay's status are also becoming more acrimonious.

Analysts said the triumvirate's decision to continue Paraguay's suspension from Mercosur membership could hurt the regional pact's economic and diplomatic standing. Key talks with the European Commission on advancing a free trade zone agreement have been on the back burner while the Mercosur quarrel is seen to be getting worse.

The Brasilia meeting was attended by foreign ministers of Argentina, Brazil and Uruguay. Venezuelan Vice President Nicolas Maduro, who also serves as foreign minister, is to represent President Hugo Chavez, who is in Cuba undergoing cancer treatment, in talks.

"It was decided to continue examining the situation without altering the suspension agreed last June following the removal of then president Fernando Lugo," Patriota said, adding that Mercosur members would be sending observers to monitor Paraguayan elections in April.

"We are going to continue 'hand to hand' with Unasur that has also suspended Paraguay and has also the intention of sending observers to the election," Patriota said.

Franco has indicated he won't welcome observers from regional nations that have suspended the country's membership. The elections are scheduled for April.

The Mercosur-Unasur position on Paraguay contrasts with the OAS stand on the issue. Franco received clear OAS endorsement after the Washington body sent a fact-finding mission to Asuncion.

Former Costa Rican President and Nobel Peace Prize laureate Oscar Arias met this week with Franco and Foreign Minister Jose Felix Fernandez Estigarribia.

"We know nobody, nowhere in the world is questioning President Franco and we can forecast that the presidential election is going to evolve normally with guarantees for all candidates and that this government is committed to free and fair elections of which I have no doubts," Arias said.

"In OAS we are convinced that the process leading to the 21 April, 2013, elections will be transparent, peaceful and normal," he said.

Arias said it was important that "the world acknowledges this and supports what the Paraguayan government is doing in a climate of absolute tranquility. That is why it is important that we should be here and I have the job of being a guarantor of this and so I will, and proudly."

Arias plans to meet all Paraguayan political parties likely to take part in next year's elections.

Arias said he will also confer with leaders of the business community, media, unions and non-government organizations, as well as members of the Electoral Tribunal.

OAS Secretary-General Jose Miguel Insulza said after an earlier visit to Asuncion that Paraguay was institutionally stable with normal political activity and full exercise of human and civil rights.