Mexico City ? Venezuelan President Hugo Chavez accused Mexican leader Vicente Fox of being a “puppy” of President Bush and said: “Don’t mess with me, sir.” Fox shot back on Monday that “we have dignity in this country” and demanded an apology.

Now the two nations are withdrawing their ambassadors.

The severing of diplomatic relations came after a week of verbal sparring that highlighted Latin America’s differences over free trade and relations with the United States. The conservative Fox tends to side with Washington on many issues, while Chavez, a socialist and populist, has been one of the hemisphere’s strongest critics of Bush.

Venezuela’s president has repeatedly accused Fox of being a “puppy” of American interests and of disrespecting him after the pair took opposing positions during this month’s Summit of the Americas.