Venezuela's president Hugo Chavez has threatened military action against Honduras after the country's president was overthrown.
Honduras' supreme court claims it told the army to oust President Manual Zelaya after his attempt to hold a referendum on his re-election.
During the coup the ambassadors of Venezuela, Nicaragua and Cuba were taken hostage.
President Chavez said Honduran soldiers left the Venezuelan ambassador on the side of a road after beating him.
Speaking on state television, President Chavez said he would do everything necessary to "abort" the coup.
U.S. Secretary of State Hillary Clinton on Sunday has also condemned the action.
"We call on all parties in Honduras to respect the constitutional order and the rule of law, to reaffirm their democratic vocation, and to commit themselves to resolve political disputes peacefully and through dialogue," she said in a statement.
President Zelaya was arrested at his home by around a dozen soldiers and taken to a military base on the outskirts of the capital, Tegucigalpa.
Mr Zelaya said soldiers rousted him out of bed, beat his bodyguards and arrested him in his pyjamas.
He was then flown to Costa Rica from where he condemned his ousting from power.
Mr Zelaya said he was a "victim of kidnapping" and a "coup d'etat," part of a plot by members of the military to remove him from power".
He said he would not recognise any replacement, asked his compatriots to peacefully resist and said the United States should demand his government be reinstated.
President Barack Obama said he was "deeply concerned", while Czech Foreign Minister Jan Kohout, whose country holds the rotating EU presidency, called for "a swift return to constitutional normality."
A neighbor told Honduran television that about 200 troops arrive at Zelaya's home in a dawn swoop.
Shortly after, tanks rolled through the streets and Army trucks carrying hundreds of soldiers equipped with metal riot shields surrounded the presidential palace in downtown Tegucigalpa.
Pro-Zelaya protesters yelled insults at the soldiers while more troops could be seen surrounding the palace.
Tear gas was also fired by police as hundreds of supporters gathered in the centre of the capital.
Mr Zelaya was elected in 2006 for a non-renewable four-year term but planned a vote asking Hondurans to sanction a future referendum to allow him to run for re-election.
He was opposed by the country's Supreme Court, the military, Congress and members of his own party, the Liberal Party of Honduras.
Last week he sacked the country's top military chief, General Romeo Vasquez, and also accepted the resignation of Defense Minister Edmundo Orellana after military commanders refused to distribute ballot boxes for Sunday's vote.
But in defiance of the president the Honduran Supreme Court unanimously voted to reinstate General Vasquez.
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