Venezuelan leader Nicolas Maduro has responded with defiance after the US recognised opposition leader Juan Guaidó as interim president, reports BBC.
Mr Maduro said Venezuela was breaking off relations with the US and gave diplomats 72 hours to leave.
But the US said "former President Maduro" no longer had the authority.
Mr Guaidó and the US have urged the army to abandon Mr Maduro, but the defence minister has instead condemned Mr Guaidó.
Seven South American nations including Brazil, Colombia and Peru have followed the US in backing Mr Guaidó as the legitimate president.
Canada is also supporting him, while the EU called for new elections.
However Mexico and Cuba Mexico, Bolivia and Cuba have expressed support for Mr Maduro.
Wednesday's dramatic events took place amid mass protests against President Nicolás Maduro, who has overseen years of economic freefall.
Hyperinflation, power cuts and shortages of basic items have driven millions of people out of Venezuela.
Mr Maduro was sworn in for a second term earlier this month, after a vote last May that was marred by an opposition boycott and widespread claims of vote-rigging.
What happened on Wednesday?Mr Maduro accused Washington of trying to govern Venezuela from afar and said the opposition was seeking to stage a coup.
"We've had enough interventionism, here we have dignity, damn it!" he said in a televised address from the presidential palace.
Earlier President Donald Trump said he recognised Mr Guaidó as interim president in an apparently coordinated move minutes after the 35-year-old declared himself acting leader.
Mr Guaidó, who is head of the National Assembly, told a cheering crowd in Caracas that the protests would continue "until Venezuela is liberated".
"I swear to formally assume the national executive powers as acting president," he said, while raising his right hand, and promised to lead a transitional government and hold free elections.
He called on the armed forces - who have so far backed Mr Maduro - to disobey the government, but Venezuela's defence minister accused him of conspiring with the US.
The BBC's Latin America Editor Candace Piette says Mr Maduro has worked hard to keep the military leadership on his side, giving officers key government posts and offering lucrative oilfield services contracts to military-linked firms.
Venezuelan NGOs said that 14 people were shot dead during protests on Tuesday and Wednesday.
Wednesday also saw counter-demonstrations in support of Mr Maduro, but these were reported to be on a much smaller scale.
What did Trump say?In a statement, he described Mr Maduro's leadership as "illegitimate" and said the country's congress was the only "legitimate branch of government" in the country.
"The people of Venezuela have courageously spoken out against Maduro and his regime and demanded freedom and the rule of law," his statement said.
The statement also said the US would hold Mr Maduro's regime "directly responsible" for any threats to the safety of the Venezuelan people.
Mr Trump suggested tougher sanctions could be imposed on Venezuela.
He told journalists he was not considering military action but added that "all options are on the table".
Secretary of State Mike Pompeo urged Venezuela's military to support efforts to restore democracy and said the US would back Mr Guaidó in his attempts to establish a government.
Mr Trump also urged other nations to follow suit in supporting Mr Guaidó.
So far, Brazil, Colombia, Chile, Peru, Ecuador, Argentina and Paraguay have done so, along with Canada.
Mexico, Bolivia and Cuba however say they are backing Mr Maduro.
The Organization of American States (OAS) has also recognised Mr Guaidó as president.
In 2017 Venezuela announced it would withdraw from the organisation, which aims to aid co-operation across the continent - accusing it of meddling in its internal affairs.