Ecuador’s U.N. Ambassador Diego Cordovez, who hosted two meetings Wednesday between the Guatemalan and Venezuelan foreign ministers, made the announcement of the breakthrough at Ecuador’s U.N. Mission on Wednesday.

"The two candidates reached an agreement to step down and they came up with Panama as a consensus candidate," Cordovez said.

The race became highly political because the United States is supporting Guatemala over leftist Venezuela, which is led by the fiercely anti-American President Hugo Chavez, who referred to President George W. Bush as "the devil" in his speech last month to the General Assembly.

Supporters of both countries refused to budge as voting dragged on through 47 ballots, the third longest vote for a Security Council seat.

Guatemala led Venezuela in all but one ballot on which they tied, but could not muster the two-thirds majority in the 192-member General Assembly to win the seat designated for a Latin American or Caribbean candidate.

Cordovez said Guatemalan Foreign Minister Gert Rosenthal and Venezuelan Foreign Minister Nicolas Maduro "will present Panama" to the 34 Latin American and Caribbean nations as a consensus candidate at a meeting on Thursday, and their approval is virtually certain.

With the backing of the two countries and the Latin American group, Panama’s election by the General Assembly for a two-year term on the Security Council is also virtually assured.

The Dominican Republic had emerged as the leading compromise candidate so the choice of Panama was a surprise. In the six ballots on Tuesday, Barbados, Ecuador, Uruguay, and Jamaica each received one or two votes, and Chile, Bolivia and Paraguay had also been mentioned as possible alternatives.

Asked why Panama had been selected, Rosenthal said: "It’s a country that unites South America and Central America. We’re concerned about the idea of divisions between the north and the south of Latin America. We would like to put that idea to rest by seeking a country that is well received at both extremes of our continent."

He said Panama had agreed to be the consensus candidate and serve on the council.

"We are recognizing today this role of Panama as a political and geographical meeting point and we are very happy to reach this consensus," said Venezuela’s Maduro. "Many people will give their opinion about this, but I think what matters today is that a sister nation has obtained our agreement, that’s what matters."

Panama’s Assistant Foreign Minister Ricardo Duran said "we haven’t sought out (the seat). They are proposing it to us. I have no further information."

Rosenthal said Guatemala was persuaded to withdraw because it could not find the 15 votes needed to win.

There were two options, he said, to drag out voting for the next two months "which we really didn’t want to do" or to "heed the suggestion of our colleagues of the Latin American group, that we should try and seek a consensus."

"We would’ve preferred for our competitors to step down, so that we can take the seat. They didn’t offer that solution. So instead of dragging this on for another month or two, we felt the time had come to step down and let a sister state take the role of the Latin American group," Rosenthal said.

"We will try again," he said.

Chile’s U.N. Ambassador Heraldo Munoz, reflecting the views of many Latin American envoys, said Tuesday that there was no chance of either country winning the seat and it was time for the two countries to reach a political solution - which the region would almost certainly support.