Cuba has mounted pictures of US soldiers torturing Iraqi prisoners at Abu Ghraib prison onto billboards outside the US mission in Havana in retaliation for US Christmas illuminations highlighting Cuban dissidents.
The decorations war on the Malecon avenue along Havana's sea front escalated Friday as Cuba ended wargames intended to dissuade any US invasion.
But President Fidel Castro also met a US delegation that wants to sell 100 million dollars of much needed food and agricultural products to the Communist island.
The Cuban authorities were infuriated when the US special interests section put up Christmas lights that had a neon "75" as the centrepiece surrounded by traditional Christmas trees.
The number was a pointed reference to 75 Cuban dissidents detained by the Communist authorities last year in a crackdown on the opposition.
The chief US representative in Havana, James Cason, was summoned to the Cuban foreign ministry on Monday but refused to take down the decorations.
Cuba responded by putting up a huge billboard in front of the US mission showing the Abu Ghraib abuse images that caused a global scandal earlier this year. The accompanying slogan proclaims: "Fascists Made In USA."
Near the public entrance to the building another image was put up showing an American marine pointing his rifle at the head of a child under the words: "Merry Christmas."
The Cuban authorities have also put up red flags with the Nazi crosses emblazoned on them.
In Washington, US Secretary of State Colin Powell chided Cuba for the display.
"I don't think that is very wise on their part," Powell said in the latest volley in the holiday season row.
Speaking in an interview with reporters, Powell refused to back down on the US decorations, which he called a gesture of solidarity with political prisoners in Cuba.
"And the Cuban government's response is to put forward and show the world a swastika?" he said.
"I don't think that is very wise on their part, and we will continue to stick by our troops down there, our diplomats down there and our Christmas display, with the `75.'"
A diplomat at the US mission in Havana, speaking on condition of anonymity, said the Cuban response was "fanatical and exaggerated."
"There cannot be a better contrast. On one side the United States is wishing Cubans a happy holidays ... and an effort to launch a debate on human rights. On the other there is an assortment of aggressive billboards."
Cuba has not had normal diplomatic relations with the United States since 1961, but each has an interests section in the other's capital for consular business. Their rivalry has regularly spilled over into such undiplomatic antics.
The Communist island this week staged wargames involving hundreds of thousands of regular troops, reservists, students and civilians to prepare for what the authorities have called US plans for an invasion.
Defence Minister Raul Castro, the president's younger brother, said the exercises were intended to make sure the US "does not commit the errors it made in Vietnam and that it is now committing in Iraq."