The beast's hairless, rubbery body and revolting features have drawn comparisons with the Montauk Monster, the still-unidentified animal photographed on a New York beach last year.
According to reports in Panama, the teenagers spotted the creature crawling out of a cave while playing in the town of Cerro Azul north of Panama City.
Fearing for the safety as it moved towards them, the youths claim they attacked the beast with sticks before throwing its lifeless body into a pool of water.
They returned later to take pictures of the corpse which were then posted on the website of the Central American country's Telemetro television station.
The images have since bounced around various cryptozoology blogs, with several explanations suggested for what it might have been.
A hooked claw visible in one of the photos has been cited as evidence for the popular theory that the creature was a sloth that somehow lost its hair.
The so-called Montauk Monster provoked intense speculation when photos allegedly taken at the Long Island resort where it was washed up were posted on Gawker, the US gossip website.
It was variously identified as a dead dog, a disused film prop and a marketing
stunt, but its remains have never been found.
I'm calling BS on this one but I think its interesting nonetheless. I wanted to see what You guys think. There are more pics on the website. Its always a possiblity that it is real, there certainly are unknown species in the world. But it doesnt seem like this is real to me.