Brazil goalkeeper Julio Cesar stops the last Uruguayan penalty by Vicente Sanchez during the Copa America semi-final in Lima on Wednesday. (AFP)

Lima: World champions Brazil set up a Copa America final against arch-rivals Argentina by beating Uruguay on penalties following a 1-1 draw in their semi-final on Wednesday.

Uruguay dominated the first half and stunned the world champions by taking a 22nd minute lead with a Marcelo Sosa header.

Brazil forward Adriano equalised two minutes into the second half with his sixth goal of the tournament in a game witnessed by a disappointing crowd of around 15,000, local interest having diminished after host Peru’s quarter finals exit.

Brazil, who have reached the final despite resting top players such as Ronaldo and Ronaldinho, then converted all five of their penalties while goalkeeper Julio Cesar saved Vicente Sanchez’s fourth attempt for Uruguay.

Uruguay made a lively start and nearly went ahead in the second minute when Dario Silva was given a clear run on goal but shot straight at Cesar.

Silva was again the culprit 11 minutes later when he contrived to miss an open goal from point-blank range, somehow turning Carlos Diogo’s header onto the crossbar when it seemed impossible to miss.

Uruguay, however, took the lead when Javier Delgado floated over a free kick from the left and midfielder Sosa, known as ‘The Duck’, stooped to head the ball past Julio Cesar.

Sosa and Delgado both came close to increasing Uruguay’s lead before halftime, the latter seeing his swerving free kick turned away by Julio Cesar.

Uruguay goalkeeper Sebastian Viera made two good first half saves, punching over Kleberson’s drive early on and then turning away a cunning Edu chip in injury time.

Brazil emerged in a different frame of mind after half-time and levelled almost straight away when Alex set Luis Fabiano away on the right and his low shot was turned in from close range by Adriano.

The scorer threatened with two left-foot shots in the next three minutes as Brazil threatened to take control.

The game lost momentum before bursting back into life in the final five minutes, when Luis Fabiano was agonisingly close for Brazil and Maicon was denied by Viera. At the end, Silva had another good chance but his shot was blocked by Juan.

Brazil coach Carlos Alberto Parreira described his young team’s penalty taking as majestic. “It was baptism by fire,” he said after Brazil’s win. “We took the five penalties majestically and we showed great emotional control.

“Penalties are also a matter of technical quality and I think we were superb, the three days we spent practising paid off.

“I’m very satisfied because we got better as we went along,” Parreira said. This young team was formed during the competition and to reach the final, after playing against two very good teams such as Mexico and Uruguay, required quality and mettle.”

Parreira was also pleased to have avoided playing Saturday's third-place match, which will be staged at high altitude in the Andean city of Cusco nearly 1,000 kilometres from Lima.

“I’m very satisfied to have got the to final and to not have to play in Cusco at 3,400 metres,” he said. “That’s something which frightened us a lot.”

Uruguay, who arrived at the Copa America discredited and dejected, won back their identity by reaching the semi-finals, coach Jorge Fossati said after the side’s penalty shootout defeat.

“We have rediscovered our identity, we have rediscovered our football and now we can be more optimistic with the (World Cup) qualifiers,” Fossati said. “We’re sad to be knocked but very satisfied with the performance of the team.

“At the start, I said the main aim was for Uruguay to win back our self-respect,” Fossati said. “I have a feeling that the respect has come back, our people are proud of this squad and are optimistic for the future.”