Hillary Clinton made a last-minute change to her travel plans last night to meet with Argentina's president Cristina Fernandez and pledge U.S. support in solving the Falkland Islands dispute.
The Secretary of State's move will come as a slap in the face for London over the row.
Mrs Clinton said: 'It is our position that this is a matter to be resolved between the United Kingdom and Argentina. If we can be of any help in facilitating such an effort, we stand ready to do so.'
Gordon Brown has already made it clear there will be no negogiations over the islands.
Argentina has objected to a British company's oil exploration off the Falklands, known in Spanish as Las Malvinas, but Britain has rejected the complaint.
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Meeting: Argentina's President Cristina Fernandez, left, shakes hands with US Secretary of State Hillary Clinton during a press conference at the government house in Buenos Aires
Clinton's offer of help came on the first full day of a Latin America tour that will take her to quake-hit Chile and regional heavyweight Brazil along with Costa Rica and Guatemala.
Clinton said she did not see the United States in a mediating role, but rather as simply encouraging dialogue.
'We're not interested in and have no real role in determining what they decide between the two of them,' she added.
'But we want them talking and we want them trying to resolve the outstanding issues between them.
'We recognise that there are contentious matters that have to be resolved and we hope that they will do so.'
At a news conference in Buenos Aires, Argentine President Cristina Fernandez said she would welcome mediation from the United States as a country friendly to both states.
She said all that her country was asking was for talks. 'I don't think that's too much,' Fernandez said.
Clinton repeated that the United States just wanted to get the two countries talking: 'We want very much to encourage both countries to sit down. We cannot make either one do so.'
America's lack of support for Britain has been blamed on the UK's decision to release sensitive U.S. intelligence on a terror suspect.
Barack Obama was accused of being 'feeble' by failing to back London in the stand-off with Argentina over the disputed islands, despite the 'special relationship'.
Argentina, which has claimed the South Atlantic islands since Britain established its rule in the 19th century, invaded them in 1982.
After a two-month war, it was forced to withdraw, but still claims the archipelago and says oil exploration by Britain's Desire Petroleum is a breach of sovereignty.
Argentina formally objected to the drilling and said it would require all ships from the Falklands to obtain permits to dock in Argentina.
The 'Rio Group' of Latin American leaders, meeting last month in Mexico, issued a statement supporting Argentina's demands to halt drilling around the Falklands, and Fernandez has said Latin American nations back Argentina in the dispute.
Brazilian President Luiz Inacio Lula da Silva said the matter should be revisited by the United Nations.
A spokesman for Gordon Brown said last week he did not expect any direct contact between Brown and Fernandez on the issue and that Britain had given no thought to any military response.
The Falklands are not an onshore oil producer and have no proven onshore reserves, but oil companies are betting that offshore fields hold billions of recoverable barrels of oil.
Desire Petroleum said it broke ground at a well on its offshore 'Liz' prospect, which could contain up to 400 million barrels, although the exploration may recover nothing.
The United States attempted to be neutral in the 1982 military clash, with then-Secretary of State Alexander Haig embarking on shuttle diplomacy that sought a negotiated settlement.
Argentina's ill-fated Falklands campaign is widely seen as a mistake by the discredited military dictatorship ruling at the time. But Argentina's government has said it will continue to seek sovereignty over the islands.
Elsewhere, defence spending on protecting the Falkland Islands has plunged by 50 per cent in just six years, it was claimed last night.
New figures published by the Government show the budget for stationing the Armed Forces 8,000 miles away from Britain has plummeted from £143million in 2005-06 to £69million in 2010-11.
Last night MPs warned that the apparent slump in defence spending on the Falklands had encouraged Argentina to raise the pressure over its right to the islands.
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Angry: Former soldiers demonstrate against oil exploration off the disputed Falkland Islands
The Ministry of Defence said the fall was because of changes to 'accounting policy' - omitting costs such as military equipment, servicemen's pay, repairs and communications from the budget.
Defence spending peaked in 1982, the year of the Falklands War, when Argentina invaded the islands before a UK taskforce seized back control. The conflict claimed the lives of 255 British service personnel and 649 Argentinian troops.
By 1989-90, the territory's defence budget had slumped to £60million, but by 2000-01 it had more than doubled to £143million - which happened to be the same amount spent in 2005-06.
But the following year, it fell to £65million and has risen by just £4million for the financial year starting next month.
The UK has 1,000-plus troops garrisoned on the islands, plus four RAF bombers on standby at the international-standard airport. Four warships are also currently on patrol in the area.
Andrew Rosindell, the Tory MP and secretary of the all-Party Falkland Islands group at Westminster, said: 'It is dangerous for the Government to give any kind of indication that Britain is not ensuring adequate defences of the islands.
'To seemingly cut defence spending while Argentina is sabre-rattling sends out a very bad message.'
Liberal Democrat MP Bob Russell called for increased defence spending on the Falklands 'to make sure that we are fully prepared, especially as we have a smaller Royal Navy'.
But Armed Forces Minister Bill Rammell said: 'There is some variation between years caused by what categories of expenditure were included.
'For example, in recent years figures do not include military equipment, military personnel pay, service children's education facilities, estate works and maintenance, IT and communication, maritime visits or air charter.'
In Buenos Aires, officials were painting President Kirchner's meeting with Mrs Clinton as a diplomatic coup in the row with Britain over the Falklands.
Last week, the Argentine government tabled a UN resolution condemning Britain for allowing oil exploration off the Falklands.
President Kirchner issued a decree last month forcing ships sailing to the Falklands from Argentina to seek a permit after learning that a rig was to start drilling.
She has also secured backing from 32 South American nations supporting its claim that Britain has occupied the islands illegally since 1833.
Meanwhile another UK firm Falkland Oil and Gas has said it is preparing to invest up to £61.7million to drill in the Falkland. It has exploration rights for the ocean south and east of the islands.
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