TORONTO : Panama were eliminated from World Cup contention after Croatia kept their hopes of progressing to the last 32 alive with a hard-fought 1-0 win on Tuesday.

Croatia, who made it to the last four of the 2018 and 2022 tournaments, were looking to bounce back after a 4-2 defeat to England in their opening Group L game .

In the end, Ante Budimir's 54th minute goal proved enough to see off the spirited Central Americans.

"You cannot win a match if you don't score," said Panama's Danish-born coach Thomas Christiansen.

But he told reporters he was "super proud" of his players for how they battled against the higher-ranked Croatian side.

Despite being eliminated from the tournament, Christiansen said Panama had taken strides forward.

"These players, after these two World Cup matches, won't be where they are today."

Croatia's most celebrated player, Luka Modric, was making his 200th international appearance, but his early headed effort on goal sailed over the bar.

Under Christiansen, Panama have implemented a tight defensive structure that helped them secure their second-ever World Cup appearance.

But it was the Panamanian offence that almost made the difference in the first half.

In the 23rd minute Jose Luis Rodriguez guided a header towards goal but the outstretched fingertips of Croatian 'keeper Dominik Livakovic redirected the ball off the bar.

The second half marked a clear momentum shift and the capacity crowd of 43,000 in Toronto with a strong Croatian majority erupted when Budimir tapped in a cross from Josip Stanisic.

Croatia should have been two up minutes later, when a perfectly weighted pass from Modric sent Marco Pasalic alone speeding towards goal.

Pasalic's first effort was stopped by keeper Orlando Mosquera and although the rebound came back to him he blasted an off-balance second attempt well over the bar.

Panama kept pressing for the equalizer but they ultimately failed to find the net, extending their World Cup goalless streak.

They face England in what will be their final match of the tournament on Friday.

Croatia have three points and will face Ghana, who moved onto four points after holding England to a goalless draw earlier, for a place in the final 32.