The two teams couldn't be separated after 120 minutes as the Brazilians capitulated with its spot kicks, failing to convert a single penalty as Paraguay held its nerve.
After two hours of goalless action, spot kicks had to decide the contest. However, the Samba stars collapsed under the pressure, missing every single shot as their opponents triumphed 2-0 in La Plata, Argentina.
"It is hard to keep giving explanation of certain things," midfielder Elano said after the match. "The sorrow is great".
As early as the eighth minute, Brazil threatened to strike first. Neymar should have capitalized on some desperate Paraguayan defending but the Santos man volleyed narrowly over after a loose ball broke kindly to him on the edge of the box.
Brazil lacked its characteristic flair going forward initially and a steadfast opposition defense prevented any meaningful advances from Mano Menezes’ charges early on.
Neymar was once again at the center of things but the in-demand forward inexplicably failed to convert a gilt-edged opportunity to the relief of Gerardo Martino’s men.
Minutes later, Brazil came even closer to breaking the deadlock. Lucio got on the end of Andre Santos’ excellent free-kick but Paraguay’s goalkeeper Justo Villar managed to block the shot from point-blank range with his feet.
Despite largely controlling the first half, the 2007 winners didn’t play with their usual incisiveness and headed into the break level after failing to break down a well-organized Paraguayan side.
Mano Menezes' men emerged from the interval in a more determined mood as they finally got into their groove. Neymar almost grabbed the lead as his shot had Villar beaten but Antolin Alcaraz was on the line to ensure their clean sheet remained intact.
This proved to be an ominous sign of things to come as Brazil laid siege on Paraguay’s goal. Neymar and Robinho went close as Ganso then drew a fine save from the inspired goalkeeper.
Villar maintained the goalless encounter exactly that way when Pato looked destined to net the opener but the shot-stopper managed to thwart the Milan striker’s effort with his foot.
Pato had more glorious opportunities to clinch the winner but his initial effort was blocked well by Villar and his second shot was headed into the side netting with the goal at his mercy.
When the goalkeeper was beaten, Edgar Barreto was on hand to deny Fred’s goal-bound header on the line as Brazil relentlessly pushed for a late goal to finish off the resilient Paraguayans.
Menezes’ side huffed and puffed right until the end of the 90 minutes but Paraguay withstood an incredible amount of pressure to close out normal time and ensure the match went on for another 30 minutes."Honestly, the only thing missing was the goal," Robinho said of the loss. "We know that we played better, it was a match of one team attacking and the other one defending. But football sometimes is unfair and that's why it's so exciting. We weren't competent enough to take advantage of the opportunities we created and ended up losing in the penalty shoot-out".
After entirely dominating the second half, Brazil’s command of play continued right from the beginning of extra time. The team still passed the ball around with swagger and confidence as Paraguay’s energy-sapped legs looked devoid of any creativity to conjure up an unlikely winner for themselves.
Frustration crept into both sides as a huge scuffle began instigated by Brazil’s Lucas Leiva and Paraguay’s Alcaraz received red cards for their petulance.
"I think that the expulsion was deserved," Leiva said. "He ended up choosing two and I'm one."
Despite having a stranglehold on possession, Mano Menezes’ team couldn’t carve open any notable chance as the first half of extra time slipped by.
Brazil looked to have run out of ideas for the second half of extra time as it once more couldn’t break down a staunch Paraguayan defense. The underdogs nearly put the holders out with minutes remaining as a wonderfully flighted cross was met by Nelson Valdez’s right foot but the volley was swept just wide of Julio Cesar’s post. But the match went to penalties as two nations collectively held their breaths to see who would win this lottery.
However, the Selecao missed every single one of their spot-kicks, with Paraguay converting just two of their own to win a bizarre shootout marred by some clear problems with the pitch at the penalty spot. Estigarribia and Christian Riveros were the only players to find the net as they helped their team to a stunning 2-0 win."Not everyone who plays best that has come out with the victory," Brazilian goalkeeper Julio Cesar said of the loss. "We were saddened to (be eliminated)".
Paraguay will now play either Chile or Venezuela in the last four on July 20 in Mendoza for a place in the Copa America final. Peru faces Uruguay in the other semifinal.