ON PERU VISIT, BUSH EMPHASIZES WAR ON TERRORISM, DRUGS

LIMA, Peru - Extending a hand to a jittery nation, President Bush declared
Saturday that the United States will work with Peru to fight terrorism.

He said the two nations share a common perspective on the problem: "We must
stop it."

In a joint news conference with Peruvian President Alejandro Toledo, Bush
said: "Security is impossible in a world with terrorists. Our nations
understand that political and economic progress depends on security."

Toledo said he and Bush share "the energy and the stubbornness" to combat
terrorism without wavering. He called it "a war with no ambiguities
whatsoever against terrorism and drug trafficking."

Bush, the first U.S. president to visit Peru, arrived three days after a
car bombing near the U.S. Embassy killed nine persons and embarrassed the
Peruvian government.

Unprecedented security greeted Bush as he arrived in Lima to meet with the
leaders of Peru, Colombia, Ecuador and Bolivia about expanding trade,
coordinating anti-terrorism efforts and curbing drug flow.

With sharpshooters perched on rooftops and heavily armed soldiers and
police lining every corner, terrorism dominated the news conference. But
anti-drug efforts were not far behind.

Bush stressed that curtailing drug trafficking requires cutting back
production, but also reducing demand in the United States. Toledo, skirting
a question about his commitment to coca eradication, said both countries
had a responsibility to counter narcotics.

"We have a long path ahead of us, and we have to walk it together," Toledo
said.

Bush and Toledo made a strong pitch on behalf of trade as an antidote to
poverty. Bush called on the U.S. Senate to pass an expanded renewal of an
Andean Trade Preferences Act, which expired in December. The law gives
Bolivia, Colombia, Ecuador and Peru duty-free access to U.S. markets for a
wide range of products.

Bush and Toledo also announced the renewal of the Peace Corps program in
Peru, which was abandoned in 1975 under an anti-American military dictatorship.

Bush also said that Palestinian leader Yasser Arafat "is not doing all he
can do to fight off terror," but that no decision had been made about
whether to send Vice President Dick Cheney back to the Middle East to hold
talks with Arafat.

A meeting of Israeli and Palestinian security officials today could
determine whether Cheney goes to Egypt this week for talks with Arafat. The
meeting also might help the American mediator, retired Gen. Anthony Zinni,
decide whether Arafat has accepted U.S. conditions for a cease-fire and
will work to implement them.

Shortly before Bush's arrival, a few dozen protesters, some waving large
red flags with the image of Marxist revolutionary Che Guevara, tried to
rally in front of the Palace of Justice, not far from where Bush was to
meet with Toledo.

Police fired tear gas and swarmed the protesters, making several arrests.

Peru's historic center near the presidential palace was sealed, and
Peruvian naval vessels patrolled the waters off the coast of the port city
of Callao and along the coastline of Lima, the capital. Peruvian press
reports said 7,000 to 22,000 police officers had been deployed throughout Lima.

Adding to the tension, at least six homemade bombs exploded in a suburb
east of Lima. The devices, which did little damage, were thrown from a
passing car, according to Peruvian radio station RPP Noticias.

Colombian President Andres Pastrana and Bolivian President Jorge Quiroga
arrived before dawn to keep would-be terrorists guessing. Quiroga said he
expected the leaders to discuss terrorism.

"It's a theme that has been the agenda of the whole world since the 11th of
September," Quiroga said. "Bolivia has said for some time that terrorism
and drug trafficking are twin brothers, or two sides of the same coin. One
feeds the other.

"You saw that in Afghanistan. When the presence of the state fades, drug
trafficking and terrorism appeared."

Bush said the United States had tripled assistance to Peru for fighting
drugs but also had an obligation to reduce U.S. demand for illegal drugs.

"We've got to do a better job at home of convincing Americans to stop using
drugs," he said. "That will, in turn, help the region."

The president came out of his meeting with Toledo having made no decision
on whether to resume drug surveillance flights over Peru.

They were suspended after a Peruvian military jet shot down a plane
carrying American missionaries, killing Veronica Bowers, 35, and her infant
daughter, Charity. A CIA-operated surveillance plane had mistakenly
identified the aircraft as a possible drug-smuggling flight.

"We are reviewing all avenues toward an effective policy of interdiction,"
Bush said. He said the incident had caused the United States to step back
and study how best to combat the trafficking of narcotics.

"We want to make sure that when we work with countries like Peru, we
achieve the common objective, we make it hard for narcotraffickers to move
through their lands and cross their oceans," he said.

Colombia, Peru and Bolivia are the world's leading growers of coca, the
plant from which cocaine is made.

The three countries face some form of drug-related insurgency and want Bush
to open U.S. markets to their farm products to provide alternative crops to
coca growers.

Colombia is battling Marxist rebels and right-wing paramilitaries, both of
which buy arms with money earned protecting drug traffickers. There are
fears that Bolivian coca farmers, financed by drug lords, might be taking
up arms against government troops. In Peru, the Wednesday blast is
refocusing attention on the link between drugs and terror.

The Shining Path terrorized Peru for more that a decade until its leader
was captured in 1992. The Shining Path has regrouped and is flush with cash
to rearm because guerrillas are paid to shepherd coca paste through the
Andean highlands.

Bush pledged last week to help Peru fight terrorism. For weeks, the
Peruvian media have speculated that the United States wants to place a
military base in the country to fight drug traffickers and the guerrilla
groups in Colombia and Peru that protect them. The United States and
Peruvian governments have denied that.

One issue left unaddressed by the two leaders was the fate of Lori
Berenson, an American sentenced to 20 years in prison for collaborating
with a terrorist group. Berenson's supporters have been lobbying Bush to
intervene on her behalf, but the administration has been wary of doing so
since Peru's high court upheld the sentencing.

Bush was scheduled to travel today to El Salvador, where he again will tout
the benefits of free trade.