What began as an upbeat week for MLS at the CONCACAF Champions League dissolved into immense disappointment Thursday, and instead of setting itself up well for the quarterfinals, the league faces long odds of reaching the Club World Cup for the first time.

Poised to win the group and earn a mid-level seed, the Houston Dynamo failed to secure a point at Arabe Unido in Panama and was ousted, 1-0. The Los Angeles Galaxy was safely through to the quarters and eyeing a top-three seed before being destroyed in San Salvador, 4-0, by a Metapan club that had already been eliminated and was playing in front of a sparse crowd at Cuscatlan Stadium.

“Really disappointed with our team’s performance,” Bruce Arena said. “I did not underestimate the opponent. And if our team did, it certainly showed.”

The Dynamo did not appreciate the tactics, officiating and fan behavior in Panama.

As a result, the three MLS teams in the next stage will fill the bottom three seeds and face Mexican clubs in home-and-home encounters starting March 11 at the U.S. venues. The decisive second legs a week later will take place in Mexico.

The pairings, based on points and tiebreakers from group play:

1. Toluca vs. 8. San Jose Earthquakes

2. Cruz Azul vs. 7. Sporting Kansas City

3. Tijuana vs. 6. Los Angeles Galaxy

4. Arabe Unido vs. No. 5 Alajuelense

Both the Dynamo and Galaxy rested most regulars ahead of MLS finales this weekend, but neither displayed the depth necessary to balance league and international play. Houston will now travel to Washington, desperate to defeat woeful D.C. United on Sunday afternoon and receive help in other matches in order to qualify for the playoffs. Los Angeles visits Seattle on Sunday evening with the hope of finishing in the top three and avoiding a first-round playoff game.

Metapan’s Nicolas Muñoz, a 31-year-old Panamanian forward, scored four goals in 12 minutes of the first half to bury the Galaxy. Video: