By Simon Watts BBC News

The presidents discussed a wide-ranging agenda

Leaders of several South American countries have met in Paraguay aiming to boost democracy and the regional trading bloc, Mercosur.

They expressed support for a constitutional solution to crisis in Bolivia, and discussed building a new gas pipeline from Peru.

But Mercosur, whose full members all come from the southern tip of Latin America, faces a difficult future.

Mercosur aims to promote democracy and trade integration in South America.

At this summit, the leaders of the grouping tried to tackle the serious problems the continent faces on both counts.

The recent unrest in Bolivia and Ecuador, where two presidents were forced from office in as many months, showed that street protestors have the power to put elected democracies into a state of almost permanent crisis.

Trade talks hindered

Mercosur already has provisions to expel any of its members which break away from constitutional rule.

At this summit, the grouping added a protocol on observing human rights, which is intended to boost that deterrent.

MERCOSUR Argentina Brazil Paraguay Uruguay Associate members Mexico Venezuela Chile Bolivia Peru

Mercosur's future as a trading bloc modelled on the European Union also faces problems.

The two biggest members, Argentina and Brazil, have clashed over how to address the imbalances that closer economic integration throws up.

Mercosur agreed to create a development fund for the poorest parts of the bloc, but did not address the underlying problem.

In addition, Mercosur's internal fights are hindering its trade negotiations with potential partners such as the European Union.

Within South America, Mercosur faces competition from plans for a much more politicised union covering the whole continent.