In a bid to defuse the bitter dispute over a new constitution and land reform that threatens to tear apart the poor Andean nation, Chile called for an emergency meeting of South American leaders on Monday.
"A larger tragedy has to be avoided," said Venezuelan President Hugo Chavez, a strong ally of Bolivia's leftist president, confirming he would attend the meeting.
Morales described as an ambush a gunbattle in the eastern province of Pando on Thursday that led him to impose martial law the next day. "These people were massacred," he told a news conference on Saturday.
Interior Minister Alfredo Rada said 16 people were killed in the clash - the majority of them peasants who back Morales - and authorities said another two people died Friday at Pando's main airfield as government troops took control, opening fire to disperse protesters.
Bolivia's first indigenous president said he would not hesitate to extend the state of siege if necessary to the other three pro-autonomy provinces in eastern Bolivia where separatists seized government offices and natural gas fields last week in the gravest crisis of his nearly 3-year-old presidency.
Government opponents are demanding Morales cancel a Dec. 7 referendum on a new constitution that would help him centralize power, run for a second consecutive term and transfer fallow terrain to landless peasants.
The emergency summit in Chile comes after both Morales and Chavez expelled the U.S. ambassadors in their countries to protest what they say is Washington's inciting of anti-government protesters in Bolivia.
U.S. officials call the accusations baseless.
At Saturday's news conference, Morales said "Brazilian and Peruvian assassins under the command of the governor of Pando" took part in what he said was an ambush of government supporters.
Pando Gov. Leopoldo Fernandez denied having anything to do with the violence, saying it was not an ambush but rather an armed clash between rival groups.
"The government has a great ability to distort things, and its arguments are always the same, accuse without reason," Fernandez told Radio Fides.
Peasant leader Antonio Moreno told The Associated Press in a phone interview that the violence began when he and several truckloads of companions came upon an opposition blockade on a jungle highway. He said there was some fighting, then suddenly a man exited a vehicle and fired on the farmers with a submachine gun.
"The campesinos fled to the mountain, while others jumped into the river," Moreno said.
National Health Minister Ramiro Tapia told Erbol radio that isolated shooting incidents involving opposition protesters Saturday were making it difficult for the military to enforce martial law in Pando's capital, Cobija, on the border with Brazil.
Interior Ministry officials told the AP that they expected more bodies to turn up from Thursday's violence, which occurred 30 kilometers (20 miles) from the provincial capital of Cobija.
The state of siege prohibits people from gathering or carrying weapons. It was declared hours after Morales and opposition governors from the four eastern provinces agreed to hold talks aimed at ending the crisis.
"We all agree that we have to look for a point of compromise," said Carlos Dabdoub, autonomy secretary in Santa Cruz - Bolivia's richest province and the center of anti-Morales opposition.
The protests temporarily disrupted natural gas exports to Brazil, Bolivia's No. 1 customer.
Brazilian President Luiz Inacio Lula da Silva, who said Saturday he would attend the regional meeting in Chile if Bolivia asked him to, urged both sides to negotiate.
He also appealed for gas supplies to continue, saying, "We have accords and contracts that must be respected."