Brazil kept their dream of a sixth World Cup alive after narrowly escaping a tremendous challenge from Chile on Saturday.

The two sides tied 1-1 in the regular and extra time of the round of 16, but Brazil withstood the pressure in the penalty shoot-out by claiming the victory 4-3 in aggregate goals.

David Luiz's 18th-minute goal from a corner put the host ahead but Alexis Sanchez took Brazilian defense's error to level the score for Chile in the 32nd minute. Chile looked to be the stronger side in the second half but Brazil hold on to force into extra-time.

Chile nearly won it with a few seconds left as Mauricio Pinilla rattled the crossbar. The 1-1 tie forced both sides into the penalty shoot-out.

In the penalty shoot-out, when the fifth Chilean player Gonzalo Jara hit the post, the Estadio Mineirao in Belo Horizonte erupted into wild excitement as Brazil eventually won 3-2.

Neymar scored the third after David Luiz and Marcelo also scored from the spot. Brazil goalkeeper Julio Cesar saved the first two penalties and watched Gonzalo Jara's final attempt hit the post.

"As we have said when we heard of the draw, we know we will have difficulties against Chile. they are a organized, balanced team with good players," said Brazilian coach Luiz Felipe Scolari.

"Some people say even the best players feel the pressure in world cup, as we have so many new young players, we are gaining experience as we go on. We will make less mistakes next match because it is knock-out stage. We are fighting at home."

Brazil will next face either Colombia or Uruguay in the quarterfinals.

Chile have ended in all of the four World Cup encounters with Brazil in heavy defeats. In both 1998 and 2010, they lost by three-goal margins, in the round of 16 in 1998 and 2010 after second-place finishes in their group. The other reverse was a 4-2 semifinal loss on home soil in 1962.

Chile have only managed two draws from 13 meetings since they last overcame the Brazilian side in 2000.

However, Chile's coach Jorge Sampaoli still felt proud for his team. "I feel proud for my players, they represent our nation very well. We played against Brazil for 120 minutes, it's harsh for us to lose. But we have given everything, my players have given everything."

Scolari brought Fernandinho in to replace Paulinho, while Luiz still entered the line-up despite some back troubles recently. In the Chilean side, the influential Arturo Vidal returned after sitting out Chile's last game against the Netherlands.

In quite stunning noise at the Estadio Mineirao, highly spirited Brazil asserted their dominance at the beginning.

In the 18th minute, Neymar sent in a superb corner which was flicked on at the near post by Thiago Silva. Luiz ran on to the ball at the far post and put pressure to Gonzalo Jara before the ball ending up in the net.

But the Chilean side fought back using a mix-up in the Brazilian defence in the 32nd minute. In Brazil's own throw-in, the ball was eventually worked inside the box to Sanchez. The Barcelona striker composed himself before hitting a shot past Cesar.

Brazil had several chances in the rest time of first half, but efforts from Neymar, Fred and Dani Alves all failed to convert on goal.

Ten minutes into the second half, Hulk brought down a cross in the box and put the ball in, however his goal was cancelled as he firstly illegally handled the ball.

Chile gradually controlled the play as Brazil even struggled to get the ball out of their half. In the 64th minute, Charles Aranguiz's fire was denied by a great reaction from Cesar to push the ball wide.

Substitute Jo nearly made an instant impact as he tried to finish Hulk's cross but failed to touch the ball. However, it was Chile who continued to press ahead and gave the Brazilian backline problems with each move forward.

In the extra time, both sides looked tired after a tense 90 minutes but in the final minutes both sides created scoring chances. Pinilla nearly won it for Chile on 120 minutes but his shot smashed the bar. Brazilian midfielder Ramires, who replaced Fernandinho in the second half, also fired a shot afterwards at the top of the box but his shot rolled just wide.