Guatemala and Venezuela last night chose Panama as a consensus candidate and withdrew from the race for a seat on the UN Security Council, Ecuador's UN ambassador said.
The 35-member Latin American and Caribbean group must still approve the choice for the seat on the most powerful UN body, and then the UN General Assembly will vote.
But the decision by Foreign Ministers Gert Rosenthal of Guatemala and Nicolas Maduro of Venezuela is expected to stand.
Guatemala, backed by the United States, led Venezuela by about 25 votes in all but one of the 47 rounds of balloting, which began on October 16th and ran for five days.
But Guatemala fell short of a required two-thirds majority in the 192-member UN General Assembly to secure the seat. The 47th round was conducted on Tuesday and a new vote is scheduled in the assembly next Tuesday.
Venezuelan President Hugo Chavez has called the contest a campaign against US dominance over developing nations.
Although Venezuela is a major oil supplier to the United States, ties have deteriorated, particularly since Mr Chavez described Washington as his main enemy and called President
Bush "the devil" in a General Assembly speech in September. Diplomats said that cost him votes.
They said that Panama was not mentioned until late in the day of talks between Guatemala and Venezuela. Other potential candidates included Barbados, Costa Rica, the Dominican Republic and Uruguay.