By Sara Miller Llana,
Staff writer, CSMonitor

(AXcess News) Mexico City - There are no fiercer foes in Latin America today than conservative Colombian President Alvaro Uribe and leftist Venezuelan President Hugo Chavez. So as Mr. Uribe steps down and incoming president Juan Manuel Santos steps in, hopes were high that relations between the two South American neighbors could stabilize.

But ahead of Mr. Santos's inauguration Aug. 7, the relationship could not be worse.

Venezuela on Thursday cut off all diplomatic ties after Colombia charged that Venezuela is sheltering leftist guerrillas. "We have no other choice but to totally break our relations with our brother nation of Colombia," Mr. Chavez declared.

It might seem from rhetoric alone that the move creates an insurmountable obstacle to renewed relations between the two countries. But Michael Shifter, president of the Inter-American Dialogue in Washington, says pragmatics and voter sentiment will drive the relationship in the coming years, and that calmer seas are ahead - despite this most recent spat.

"This is vintage Chavez, and vintage Uribe, playing out their last act together as presidents at each other for eight years," says Mr. Shifter. "But I think when Santos takes over, things are going to calm down. I think there is a lot at stake for both countries."

On Thursday, the Colombian ambassador to the Organization of American States (OAS) presented evidence to back up charges that Chavez is protecting Marxist guerrillas, including aerial photos and videos. He demanded that Venezuela allow international teams to inspect sites where Colombia alleges some 1,500 rebels are hiding. "We have the right to demand that Venezuela doesn't hide those wanted by Colombia," Luis Alfonso Hoyos said.

His Venezuelan counterpart, Roy Chaderton, called the evidence suspect. Chavez has long denied Colombian accusations against him.

Hopes for improved relations

Chavez and Uribe, a staunch US ally, have squabbled for years - over Colombia's claim that Venezuela supports the Revolutionary Armed Forces of Colombia (FARC), and over Venezuela's claim that Colombia's close relationship with the US could destabilize the region. At times the prospect of a military conflict has flared, such as when a Colombia raided on a FARC base on Ecuadorian soil in 2008. Chavez also suspended trade last year to protest plans for a US military base in Colombia.

Yet the two share a long border and both stand to gain economically by improved bilateral relations.

According to a new report by the UN Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago, Chile, Colombia is expected to grow by 3.7 percent, slower than many of its neighbors, while Venezuela's growth estimates are negative 3 percent, the worst in Latin America, excluding the Caribbean.

President-elect Santos has indicated a willingness to forge a warmer relationship with Chavez, but this latest rift will set back those aspirations, says Carlos Romero, a political analyst at the Central University of Venezuela in Caracas. "The real loser here is Santos," he says.

Mr. Romero agrees with Shifter that with Uribe out of office, there is hope of a stronger relationship. Even Chavez on Thursday indicated some willingness to put tensions behind. "Hopefully [Santos will] understand that leftist and right-wing governments can live together," Chavez was quoted saying.

"Colombia and Venezuela have different allies, but they are neighbors," Mr. Romero says. "Unfortunately, Santos faces more obstacles now."