MELBOURNE, Australia — Venus Williams squandered a match point before losing 2-6, 6-3, 7-5 on Thursday to 46th-ranked Carla Suarez Navarro of Spain in the biggest upset so far at the Australian Open.

Williams hardly looked like the reigning Wimbledon champion against the 20-year-old Suarez Navarro, whose best showing in three previous Grand Slams was reaching last year's French Open quarterfinals.

Usually the aggressor with her powerful shots, sixth-seeded Williams was sluggish as she was broken while serving for the match and dropped the last five games with the crowd cheering loudly for Suarez to finish off the victory.

"She was super consistent and aggressive and just went for her shots," said Williams, who has seven Grand Slam titles and now will have to hope for a doubles crown here with sister Serena. "Probably one of her best matches she's ever played.

"I wasn't in control of the points. I'm definitely used to dictating the points a little bit more. It was kind of a pattern that wasn't the best for me."

Suarez Navarro, overmatched at first, broke twice in the second set as Williams let a number of reachable shots fly past. She saved a match point while serving at 4-5 in the deciding set and broke Williams in the next game, aided by a double-fault from the 28-year-old American.

Suarez Navarro squandered one match point while serving at 40-15 in the next game before Williams netted a forehand for her 37th enforced error.

Serena Williams struggled earlier and headed straight to the practice courts after a 6-3, 7-5 win over Argentina's Gisela Dulko. She gave her performance a "D-minus at best" as 45th-ranked Dulko matched her shot for shot.

"Lots and lots and lots of room for improvement," second-seeded Serena Williams said. "But it's good that I was able to win, too, when I wasn't playing my best."

Rafael Nadal, meanwhile, got top marks for his second straight match, a 6-2, 6-3, 6-2 win over Croatia's Roko Karanusic. The top-ranked Spaniard has dropped only 11 games in six sets and next faces German veteran Tommy Haas, who beat Flavio Cipolla of Italy, 6-1, 6-2, 6-1.

Nadal's biggest problem was finding a rhythm against the inconsistent, 92nd-ranked Karanusic, who has never made it past the second round in 11 Grand Slam appearances.

Fourth-ranked Andy Murray — a potential semifinal opponent for Nadal — was playing in the late match.

Serena Williams started fast and looked to be headed to a quick victory, stepping in to whack Dulko's second serve for a clean winner the first time she saw it. By the time Dulko hit her first winner, she already was down 3-0.

But the Argentine soon was slugging it out from the baseline with the powerful Williams. She saved triple set point while serving at 2-5, but Williams finished it off the next game with a pair of aces.

Dulko, who said she wasn't sure she'd be able to play after running a high fever following a doubles match Wednesday, pulled ahead 3-0 in the second set.

Williams, appearing to be trying to overpower her, broke to within 3-2. Dulko refused to be intimidated, breaking again in the next game.

The Argentine player served at 5-3 and held six set points in a game that went to deuce 12 times. But Williams hasn't won nine Grand Slams by caving in to pressure and finally converted breakpoint No. 7.

"It was a very tough second set; she started playing unbelievable, hitting winners left and right," Williams said. "She had a couple of opportunities, but I always felt I wasn't going to lose."

Olympic champion Elena Dementieva improved her 2009 winning streak to 12 matches with a 6-4, 6-1 win over Iveta Benesova. The 27-year-old Dementieva reached the French Open and U.S. Open finals in 2004 but has not returned to the final of a major since.

Her highlight last year was a win over fellow Russian Dinara Safina in the gold medal match at the Beijing Olympics.

Amelie Mauresmo, who won here and at Wimbledon in 2006, rallied to beat Britain's Elena Baltacha.

Fellow Frenchwoman Virginie Razzano ousted No. 14 Patty Schnyder of Switzerland 6-3, 6-1.

Other women advancing included No. 8 Svetlana Kuznetsova of Russia, No. 12 Flavia Pennetta of Italy, No. 13 Victoria Azarenka of Belarus, No. 18 Dominika Cibulkova of Slovakia, No. 21 Anabel Medina Garrigues of Spain and No. 22 Zheng Jie of China.

On the men's side, No. 9 James Blake won in straight sets for the second time, never dropping serve while beating Sebastien de Chaunac 6-3, 6-2, 6-3.

Four seeded Frenchmen also advanced.

Fifth-seeded Jo-Wilfried Tsonga, last year's runner-up, had a tough 6-7 (4), 7-6 (8), 7-6 (7), 6-2 win over Ivan Ljubicic of Croatia. He joined No. 6 Gilles Simon, No. 12 Gael Monfils and No. 24 Richard Gasquet in the third round.

Also winning were No. 14 Fernando Verdasco, No. 17 Nicolas Almagro and No. 31 Jurgen Melzer. No. 13 Fernando Gonzalez of Chile, the 2007 runnerup, beat Argentina's Guillermo Canas.

Dudi Sela became the first Israeli man to make the third round of a major since 1994, when he beat Romania's Victor Hanescu.