Mexico reacted swiftly, with Fox's spokesman, Rodolfo Elizondo, decrying the playing of a recording of the two presidents talking confidentially as "unacceptable" but saying Mexico would maintain diplomatic relations with Cuba.

Castro, speaking before a national TV audience, insisted Fox lied about the Cuban leader's hasty departure last month from a U.N. aid summit in Monterrey, Mexico.

Cuba said at the time that Mexico, working on behalf of the United States, pressured Castro to either stay away from the summit or make himself scarce before President Bush arrived. Mexican President Vicente Fox and Foreign Minister Jorge Castaneda both denied pressuring Castro to leave.

"They were all lying left and right," Castro said.

The Cuban president played a tape of a private telephone conversation he had with Fox on the eve of the summit, in which Fox clearly urged Castro to leave the meeting early and urged him "not to attack the United States or President Bush."

On the tape Fox asks Castro to make his presentation at the summit and to return to Cuba on Thursday "so that you don't make Friday complicated for me." Bush was scheduled to arrive on Friday.

Making public the tape was a clear break with presidential protocol. Castro said the aftermath "of telling these truths could be that diplomatic relations are severed."

But Mexico did not react that strongly.

"Independent of anecdotes and episodes like this one, the Mexican government will continue its diplomatic relations with the republic of Cuba," said Elizondo, reading a statement to reporters on Monday evening.

The statement criticized the lack of democracy in communist Cuba and applauded Mexico's own democracy in words clearly directed at Mexico's pro-Cuba opposition, which has already criticized Fox for his handling of Castro's appearance at the Monterrey summit.

CASTRO OFFERS RESIGNATION

Castro said he would resign from office if the conversation proved false and challenged Fox to resign if it was not.

"If anyone could prove that the conversation never took place ... I would firmly offer my resignation," Castro said.

Mexico has been Cuba's firmest Latin American ally since Castro seized power in a 1959 revolution.

But relations have cooled in recent years with Mexico's closer relationship with the United States and its criticism of the human rights situation in Cuba.

Castro apparently held off releasing the tape until Mexico's vote last week at the U.N. Human Rights Commission hearings in Geneva to censure the island.

Castro termed the move a "despicable betrayal" as Fox had promised him "that Mexico would never do anything against Cuba" at the U.N. forum. Cuba has said that Mexico and other Latin American countries voted at the behest of the U.S. government.

"On the contrary, Havana was the only government that put pressure on Mexico regarding its vote in Geneva regarding the human rights situation in Cuba," Elizondo said.

The motion, the first in which Latin America has taken the lead in criticizing Cuba at the commission hearings, was approved by 23 votes to 21, with nine abstentions.

Cuba has been condemned by the 53-state Commission in past years but most Latin American countries, including Mexico, have abstained in the votes.

(additional reporting by Fiona Ortiz in Mexico City)

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