Hosts Brazil have progressed to the quarter-finals of the World Cup by edging out Chile in an enthralling penalty shootout at the Estadio Mineirao in Belo Horizonte.

After a feisty start to the game, early efforts from Marcelo and Marcelo Diaz at either end flew wide before Brazil appealed wildly for a penalty in the 13th minute.

Hulk tumbled under the challenge of Mauricio Isla, but English referee Howard Webb didn't feel that there was enough contact to warrant the fall.

Brazil took the lead in the 18th minute when Neymar's corner was flicked goalwards by Thiago Silva and bundled home at the back post by centre-back partner David Luiz - his first goal for his country.

Replays indicated that it may have been an own goal by Gonzalo Jara, but Luiz was credited with the goal as it was unclear who diverted the ball into the net.

The men in yellow were only ahead for a quarter of an hour before Alexis Sanchez levelled the scores with his second goal of the tournament.

Hulk gave away possession cheaply in the corner and Sanchez was found by Eduardo Vargas before coolly rolling the ball past Julio Cesar into the corner.

Brazil had several chances to go back in front before half time, but Neymar headed wide, Fred shot over and Dani Alves was denied by an acrobatic Claudio Bravo save.

Ten minutes after the break Hulk thought that he had restored Brazil's lead, but his finish was ruled out as he appeared to control the ball with his right bicep before finding the bottom corner.

The hosts' energy levels then dipped and Chile had a spell on top, with Charles Aranguiz spectacularly denied a goal by Cesar's instinctive save.

Jo was sent on to replace Fred up front for Brazil, and the former Manchester City striker had a clear-cut chance to get on the scoresheet when Hulk picked him out, but he couldn't make contact at the back post.

With 10 minutes on the clock, Neymar was then picked out from the other wing by Barcelona teammate Alves and, although he headed the ball goalwards, it was straight at Bravo.

Next to try his luck was Hulk, but he too was denied by Bravo after dancing his way into the box and striking towards the top corner with his right foot.

Both sides needed a break to take in some fluids, and Webb blew the whistle to signal the end of 90 minutes and send the pulsating tie into half an hour of extra time.

There were very few chances in the extra period, but Chile almost stunned the hosts with a 120th-minute winner when substitute Mauricio Pinilla rattled a shot against the crossbar.

Penalties would be required to separate the duo and Luiz started Brazil off with a firm strike into the corner.

Cesar then saved Chile's first from Pinilla before Willian dragged wide with Brazil's second.

Sanchez was also denied by Cesar before Marcelo and Aranguiz put theirs away. Bravo kept Hulk out and then Diaz scored his to make it 2-2 after four penalties.

Neymar coolly slotted home Brazil's fifth and then Jara fired against the post to send Brazil through.

They will next face another South American side - the winner of tonight's last 16 tie between Colombia and Uruguay - in the quarter-finals.