When Portugal beat Spain 1-0 at Euro 2004 in Lisbon, the honking of car horns kept me awake deep into the night as the hosts celebrated their first victory in 23 years over their biggest rivals.

Nuno Gomes' winning goal sent Spain crashing out of a major tournament prematurely again, and allowed eventual champions Greece to qualify for the next round having scored more goals than Spain.

Today, in Cape Town, the Portuguese take on Spain again- and a win would make that 2004 celebration seem tame indeed.

Countries' histories off the pitch often add spice to these encounters – England's tussles with Germany, Argentina and Scotland, for example – and the battle of Iberian rivals is no exception. Much of Portuguese history involved a battle for independence from Spain.

The Spanish recognised Portuguese independence in 1143, but then annexed their neighbours in 1580. Portugal regained their independence by expelling Spain in 1640, and that proclamation of independence was recognised by the Spanish eight years later.

That history gives today's match added meaning — now, the Portuguese have a chance to knock off the reigning European champions, and earn a quarter-final date with either Paraguay or Japan. Both Iberian countries would fancy their chances against either of those two teams, so the stakes are high.

While previous Portuguese sides relied on the skill and guile of the "golden generation" of players who won FIFA under-20 championships under the guidance of Carlos Queiroz, the success of today's Portugal rests on an airtight back four and goalkeeper Eduardo, who kept three clean sheets in group play.

That defence is the springboard for a thrilling counter-attacking game. Benfica's Fabio Coentrao, who only earned his first cap in March, has been the best left back at this World Cup. He links up with Cristiano Ronaldo, Tiago, Raul Meireles and others as Portugal break forward when their opponents have committed men to attack.

The approach is not unlike Manchester United's when Ronaldo was scoring 42 and 26 goals for the 2008 and 2009 Premiership champions.

Neutrals seeking a spectacle will hope that Spain accommodates the Portuguese by coming forward – their front six is arguably the best in the world – so the question will be whether Portugal's defence can survive against strikers David Villa and Fernando Torres, and the midfield of Xavi, Iniesta, Alonso and Navas.

We saw the pre-tournament favourites labour for the first half an hour against Chile in Tshwane/Pretoria on Friday night until a goalkeeping error handed them the opportunity for a 1-0 lead. Villa obliged and, their nerves settled, they went on to win comfortably.

Spain seem to be playing themselves into the tournament – the opening match loss to Switzerland is just an unpleasant memory – and, like their star striker Fernando Torres, have yet to hit top form.

Villa has carried the goalscoring responsibilities so far while Torres looks out of sorts after his injury layoff. Should the Liverpool star hit top form, Spain's championship prospects will look even brighter.

More than 500 years ago, the 1494 Tordesillas Accord between Portugal and Spain split up the newly conquered areas of the New World.

Today, there will be no such spirit of compromise – and that should make for one of the best matches of this World Cup.

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Our weekend was a dream….US v Ghana on Saturday in Rustenburg, and Argentina v Mexico on Sunday at Soccer City, followed by last night's Brazil v Chile encounter at Ellis Park. After a week in Johannesburg, it is time for a change – everyone raves about Cape Town, so it's time we took a look for ourselves. We fly to Cape Town this morning, and see Spain v Portugal tonight before Saturday's quarter-final between Argentina and Germany.

Veteran World Cup observer Duncan Hall is reporting exclusively from South Africa for The Royal Gazette.