Opposition protesters reportedly shot and killed seven peasant farmers in a remote eastern Amazon region of Bolivia called Pando on Thursday, and an employee of the opposition-led regional government employee was also killed, a government official told Reuters.
The violence is rooted in an ongoing stand-off between President Evo Morales' leftist government and opposition governors who control four of the country's nine regions --some of which hold the country's valuable natural gas reserves.
The governors are demanding more energy revenue and opposing Morales plan to distribute land to the poor and rewrite the constitution.
The governor of natural gas-rich Tarija province, Mario Cossio, said he would meet with Morales late Friday in La Paz, adding that he would represent three other rebel governors who have so far rejected talks, Reuters reported.
Morales, the first indigenous president of Bolivia, has vowed a socialist transformation in the country but many of his reforms have stalled due to powerful opposition from the wealthier eastern part of the country.
The U.S. ambassador to Bolivia was expelled Wednesday for allegedly inciting the opposition protests. On Thursday, the United States responded by telling Bolivia's envoy to leave Washington.
"In response to unwarranted actions...we have officially informed the government of Bolivia of our decision to declare Ambassador Gustavo Guzman persona non grata," State Department spokesman Sean McCormack said.
Anti-government demonstrators also seized natural gas fields Thursday, halting half of Bolivia's gas exports for about seven hours.
Morales said at the opening of a public works project, "We are going to be patient and cautious," reported the Associated Press. "We are going to hang in there. But patience has its limits, really."
In a show of support for ally and fellow-leftist Morales, Venezuelan leader Hugo Chavez also expelled the U.S. ambassador from Caracas on Thursday and shouted insults at the United States at a political rally.
"Go to hell...Yankees, we are a dignified people, go to hell a hundred times," Chavez said, reported Reuters.
"The yankee ambassador in Caracas has got 72 hours to get out of Venezuela, in solidarity with Bolivia," Chavez said.
Chavez accused the U.S. of being behind a plot to oust him and of planning to bomb Venezuela.
"If there was an aggression against Venezuela there would be no oil for the people or for the government of the United States," he said, according to the AP.
The State Department's McCormack said Friday: "The charges leveled against our fine ambassadors by the leaders of Bolivia and Venezuela are false -- and the leaders of those countries know it."
In turn, the U.S. decided to expel Venezuela's ambassador and, in a separate move, accused two senior Venezuelan government officials of aiding drug traffickers in Colombia.
The Treasury Department announced sanctions Friday against two Venezuelan government officials and one former government minister who are believed to have helped the narcotics trafficking activities of the Revolutionary Armed Forces of Colombia, or FARC, by protecting drug shipments as they passed through Venezuela and providing arms to drug carriers.
McCormack said the sanctions had been in the works for some time and are unrelated to the diplomatic dispute.
Bolivia and Venezuela, are both resource-rich countries at the center of the growing leftist movement in the region.
The instability in Bolivia could lead to the government imposing marshal law, Bolivia's ambassador to Brazil said, according to Reuters. Bolivian Finance Minister Luis Arce said the army was sending more troops to natural gas fields and border crossings with Brazil.