Leaders from across the Americas ended a two-day summit in Columbia with no final statement, failing to agree on Cuba's inclusion at future summits in the face of US and Canadian opposition.
The vast majority of the region's democratic leaders attending the talks said they wanted Cuba - the Americas' only single party Communist state - included in future meetings.
However US President Barack Obama, backed by Canadian PM Stephen Harper, objected and the summit ended without the release of a final statement, as happened at the previous summit in Trinidad in 2009.
Cuba has never taken part in a Summit of the Americas, a regular meeting sponsored by the US-based Organization of American States.
Washington objected to its presence, arguing that the communist regime in Havana lacks democratic credentials and does not respect the human rights of its people.
Mr Obama, who is campaigning for re-election in November, cannot afford to give ammunition to his domestic right-wing opponents who reject any concessions to a government seen as infringing on the fundamental rights of its citizens.
The leaders also did not agree on a call by Guatemala to consider decriminalising drug use in view of the failure of the war on narcotrafficking, which is creating havoc across the region, particularly in central America.
The two issues dominated the proceedings, although Mr Obama said before arriving that his goal was to open markets for US goods.
Colombian President Juan Manuel Santos, the summit host, sought to put a brave face on the apparent setback, expressing "satisfaction with the results" and with the "direct and frank exchanges".
"The fact that there is no (final) statement is not a failure," he told a press conference. "There was no statement precisely because there is no consensus. We all knew there would be no accord... on the Falklands or Cuba."
"The majority of countries back Cuban participation in the process of the Americas," Mr Santos said. "A process should begin to make this a reality in the next summit."
On Saturday, Mr Santos - Washington's closest ally in Latin America - said it would be "unacceptable" to keep Cuba out of the next gathering.
On how to handle the region's drug war, he said: "We agree on the need to analyse the results of the current policy and to explore new approaches (through the OAS) to strengthen this fight and to be more effective."
Mr Obama told his peers that he favoured a debate on a new drug war strategy but opposes decriminalisation or legalisation of drugs.
On Argentina's call for support for its claim on the British-ruled Falkland islands, Mr Santos said most countries "call for a peaceful solution" to the dispute.
He said the summit reinforced "the integration and the convergence of the various interests of the region."
For Mr Obama, the summit was a mixed bag. Speaking at a business forum yesterday he hailed the "enormous progress in the region".
"It is remarkable to see the changes that have been taking place in a relatively short period of time in Latin, central America and in the Caribbean," he noted.
However, he was bluntly told by his Brazilian counterpart Dilma Rousseff to treat Latin America as an equal.
"In Latin America, we have a huge space to make our relationship one of partnership but partnership between equals," said Rousseff, whose country has gained increasing international clout as the world's sixth largest economy and Latin America's dominant power.
Acknowledging the region's growing assertiveness and independence, Mr Obama responded: "I think often times in the press the focus is on controversies. Sometime those controversies date back to before I was born ... to the 1950s ... 'yankees' and the Cold War and this and that.
"That is not the world in which we are living today," the US leader said. "My hope is that we all recognise this enormous opportunity that we have."
Mr Santos stressed the need for regional integration, increased access to technology and cooperation to tackle natural disasters and transnational crimes.
Venezuelan President Hugo Chavez, who is suffering from cancer, did not attend the summit and instead flew to Cuba for further radiation therapy.
Ecuadoran President Rafael Correa also boycotted the summit because of the exclusion of Cuba. Nicaraguan President Daniel Ortega also was a no-show.