The decision was made by Unasur, a bloc modeled after the European Union and which counts Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela as members.

The acting head of the group, Chilean President Michelle Bachelet told counterparts and high officials from the other countries meeting in Brazil that the ministerial-level defense council was essential.

She added that a meeting in Chile in early January would set the framework for the new body.

Bachelet, a pediatrician by training, also put forward a proposal accepted by Unasur that a South American health council be established.

Despite the show of unity, though, Unasur remains riven by disagreement over who should lead the bloc.

Uruguay has suggested it could quit the entity if Argentina's former president, Nestor Kirchner, is given the job.

Montevideo and Buenos Aires are currently in a tense relationship stemming from a disagreement over a cellulose factory in Uruguayan territory.

The Unasur meeting in the Brazilian resort of Costa do Sauipe was meant to have settled the leadership issue, but in the face of the internal bickering, Bachelet and Brazlian Foreign Minister Celso Amorim agreed to put a decision off until April, when a new acting bloc president took over.

The South American leaders held their gathering just before a broader summit in the same resort bringing together representatives from 33 Latin American and Caribbean nations.

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