Bolivia's attorney-general has opened an investigation into accusations of genocide against Fernandez over the deaths.

Morales told a press conference on Tuesday that the arrest complied with the martial law order put in place in Pando last week and was "legal and constitutional".

Carlos Dabdoub, a leader of Santa Cruz province, the main rebel region, said the arrest amounted to a "unilateral breaking-off" of negotiations by the government, and that the move "saddened and disappointed" the rebel governors.

US drug move

The violence has also sparked a diplomatic standoff between Bolivia and Venezuela on the one side, and the US on the other, with Morales and Hugo Chavez, the Venezuelan president, expelling Washington's ambassadors to their countries, accusing them of backing the opposition.

South American leaders backed Morales
at a summit in Chile [AFP]
Washington responded by ordering the Bolivian and Venezuelan envoys to the US to leave.

On Tuesday, the US encouraged its citizens to leave Bolivia if possible, citing concerns over further unrest.

"US citizens currently in Bolivia are encouraged to depart if the situation permits, and if you remain should remain vigilant, monitor local media, and review their security posture on a regular basis," the US state department said in a statement.

The White House also placed Bolivia, the world's third-largest cocaine producer, on a list of states that had failed to do enough to meet its counter-narcotics obligations.

"This was not a hasty decision," said David Johnson, assistant secretary of state for the Bureau of International Narcotics and Law Enforcement.

Bolivia had staged a "retreat" from its international obligations to control cocaine trafficking, he said.

On Monday, South American leaders offered Morales their backing at a summit in Chile.

In the statement the presidents of nine South American countries expressed their "full and firm support for the constitutional government of President Evo Morales, whose mandate was ratified by a big majority".

The statement was agreed to by Morales and the presidents of Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Uruguay and Venezuela.