Paraguay dumped holders Brazil out of the Copa America on Sunday, winning a quarter-final penalty shootout 2-0 after a poor match ended goalless after extra-time.

Brazil's penalty-taking proved even more execrable than much of their play, which saw them have plenty of possession but no panache in attack.

Marcelo Estigarribia and Christian Riveros converted for the Paraguayans while Elano, Thiago Silva, Andre Santos and Fred missed for the eight-times continental champions.

"When you lose you know you made some mistakes," said Brazil coach Mano Menezes. "But this happens in football and we have to live with it."

Paraguay, who last won the event in 1979, now go on to face either Chile or Venezuela, who were facing off later Sunday in San Juan.

Brazil forward Robinho tried to put a positive gloss on the defeat to a side with whom they were fortunate to draw in the group stage just eight days earlier.

"I think we played a good Copa overall. But now we must keep our heads up and go on to lift the World Cup in our homeland," said the Milan striker.

Brazil's exit followed that of hosts Argentina, beaten by Uruguay, likewise in a shootout, on Saturday.

The football never reached the level of the 'beautiful game'.

Instead, the unchannelled aggression saw Lucas Leiva and Antolin Alcaraz sent off for a tussle which sparked an ugly free-for-all in the first period of extra-time.

After Brazil had made most of the running over 90 minutes with some good approach play, which was spoiled by a lack of ruthless finishing, the extra half-hour saw chances at both ends although tiredness was clearly taking its toll.

Brazil made two changes from the side which thanked a late goal from Fred for the 2-2 group draw between the sides, Robinho in for Jadson, and defender Maicon back for Dani Alves.

Robinho joined Ganso and strike pair Pato and Neymar in an attacking formation known as Menezes' "magic quartet".

Neymar and Pato had both scored a brace in the subsequent win over Ecuador had clearly revived Manezes' faith in his strategy.

But his faith in them proved somewhat misguided on Sunday's evidence against tough opponents who gave no quarter.

While Bazil's switches were essentially tactical Paraguay boss Gerardo Martino had no choice with his change as experienced striker Roque Santa Cruz, who scored in the first game, missed out through injury.

Nelson Haedo Valdez partnered Lucas Barrios, but Santa Cruz's guile and class were sorely missed.

Maicon had a low effort blocked and Neymar fired wide before a surging Robinho run from deep found Neymar on the right but his cross floated harmessly into space as Brazil bossed most of the play but a breakthrough would not come.

Fred came on for Neymar with 11 minutes to go and then Pato had a shot charged down by onrushing keeper Justo Villar before heading the rebound into the side netting.

With five minutes remaining Brazil should have stolen it but Fred, looking to repeat his party piece of a week earlier, saw his header cleared off the line.

Then came spotkicks which were a disaster for Brazil as Elano fired over, Thiago Silva saw his saved by Villar, Andre Santos then blasted over and Fred wide.

Marcelo Estigarribia and Christian Riveros did convert and Brazil were out.