Thursday's resignation of Ambassador Milos Alcalay was an added embarrassment to Chavez, already facing a furious opposition campaign for a recall referendum against him.
Alcalay, a career diplomat, said he objected to a ruling by electoral authorities against the recall bid and to a government crackdown against the protests.
"We have a National Electoral Council which instead of providing a solution has put problems before every solution," Alcalay said.
He accused Chavez's government of becoming undemocratic and repressive. "I don’t feel I can be a spokesman for this situation," he said.
Government officials, however, dismissed the envoy's comments as hypocritical and said he was among a group of diplomats who had supported a short-lived coup against Chavez in 2002.
Meanwhile, an opposition leader was killed as protesters backing a referendum to recall President Chavez clashed with Venezuelan National Guard troops.
Regional lawmaker Elias Mata said Democratic Action party leader Eva Carrizo was killed in Zulia state some 600km west of Caracas.
Eight people have been confirmed killed and dozens injured in political unrest since Friday.