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Spain demanded Venezuela explain itself after a judge accused the South American government on Monday of helping Basque ETA rebels and Colombian FARC guerrillas plot possible attacks on Spanish soil.
A ruling by Spain's High Court said the Venezuelan government facilitated contacts between the armed groups which led to FARC asking ETA for logistical help in case it tried to assassinate Colombian officials visiting Spain, including President Alvaro Uribe.
High Court Judge Eloy Velasco issued arrest warrants for 13 FARC and ETA suspects, including one Spanish-born employee of the Venezuelan government.
Spain's Socialist government, which at one stage had relatively good relations with Venezuela's left-wing firebrand President Hugo Chavez, demanded an explanation from Caracas.
"The Spanish government will act in accordance with that explanation" Prime Minister Jose Luis Rodriguez Zapatero told a news conference in Hanover, Germany, after meeting German Chancellor Angela Merkel.
Venezuela reacted strongly to the case.
"The Venezuelan government found out by way of the press of the Spanish ruling in which it makes unacceptable, politically motivated allusions about the Venezuelan government" a statement read.
The statement said the ruling made several disrespectful references to Chavez and made unfounded and tendentious allusions about the Venezuelan government.
Speaking on radio in Uruguay Colombian President Uribe would not be drawn into making a statement.
"We have to react with prudence and find out what is happening through the diplomatic channels" he said.
The spat comes as tensions run high between Venezuela and its neighbour Colombia, over Caracas' alleged support for FARC, or the Revolutionary Armed Forces of Colombia.
Spain's relations with Venezuela have suffered in recent years, with King Juan Carlos telling Chavez to "shut up" at a summit in Chile in 2007 after the Venezuelan repeatedly interrupted Zapatero.
Spanish oil company Repsol has significant investments in Venezuela. Spain's second-largest bank BBVA also has interests there.
ETA SUSPECT "LIVED IN VENEZUELA"
The court ruling came one day after Spanish and French police dealt a heavy blow to ETA by capturing its leader Ibon Gogeaskoetxea in northern France.
One of the two ETA suspects captured with Gogeaskoetxea had recently returned from Venezuela, where he had lived for several years, Spanish counter-terrorism sources said.
According to Monday's detailed court ruling, in 2007 ETA rebels were given a Venezuelan military escort to a site in the jungle where they gave a course on handling explosives to visiting FARC guerrillas.
"This shows Venezuelan government cooperation in the illicit collaboration between FARC and ETA" Judge Velasco said in the document, adding that one of those wanted is Arturo Cubillas, who has worked for Venezuela's government since Chavez won elections in 1999.
Venezuelan legislator Hayden Pirela, who heads the parliament's subcommission for border affairs and integration, said the fact Cabillas had worked in the government did not mean Venezuela supported ETA.
FARC has killed thousands of people in a decades-old war to set up a Socialist state in Colombia. ETA has killed more than 850, fighting for independence for the Basque Country. FARC is also believed to have had training from suspected members of the Irish Republican Army (IRA) on bomb-making techniques.