BUSH, PERUVIAN TO FIGHT TERROR IN ANDES

President Bush and President Alejandro Toledo of Peru pledged today to join
together in what Toledo called "a war without quarter" against terrorism
and drug trafficking in the Andean region.

"We are partners not just through conviction," Toledo said at a news
conference with Bush. "But we ourselves have experienced the effects of
terrorism here for 20 years," including the explosion Wednesday of a
100-pound car bomb across from the U.S. Embassy that killed nine people and
wounded 30.

"We share a common perspective on terror," Bush said. "We must stop it."

The two leaders met in Toledo's Colonial-style presidential palace on
Lima's central square amid a massive security operation throughout the
Peruvian capital. More than 7,000 police officers were deployed on city
streets, many in full riot gear. No one has claimed responsibility for the
bombing, although Peruvian officials have said they suspect a resurgent
Shining Path guerrilla movement, thought to have largely disbanded after
their leader was arrested in 1992.

Already jittery U.S. and Peruvian security officials were put on even
higher alert this morning after six small homemade explosives were tossed
from a car and detonated on the roadside in a poor, eastern district of
Lima far from anywhere Bush was scheduled to visit. Police also cracked
down on a small anti-American demonstration in a central city square, using
tear gas and arresting 18 people.

Bush's one-day visit, the first to Peru by a sitting U.S. president, was
designed to demonstrate the administration's strong interest in Latin
America, particularly the Andean countries where the United States is
funding major military and development aid programs to try to stop the
production and export of cocaine and heroin to U.S. markets.

The presidents of Colombia and Bolivia, and the vice president of Ecuador,
also flew here to meet with Bush tonight following his bilateral talks with
Toledo.

There were high hopes in the region that Bush would arrive with a major
trade deal, and would announce the renewal of a joint anti-narcotics aerial
surveillance program suspended last year. But he had little to offer beyond
a pat on the back for their democratic governments and a promise to keep
working on those issues.

Bush blamed the Senate for failing to vote on the Andean Trade Preferences
Act, a 10-year agreement that expired in December. Although the House
extended and expanded the trade pact several months ago, a handful of
senators have objected to eliminating import duties on textile goods and
other regional products. Regional governments have complained privately
that the administration, distracted throughout the fall by the war against
global terrorism, failed to push the agreement.

The aerial surveillance program, jointly operated with the United States in
Peru and Colombia, was shut down in April when the Peruvian air force shot
down an aircraft carrying U.S. missionaries, killing a woman and her infant
daughter. A CIA-piloted plane patrolling over northern Peru mistakenly
targeted the plane as a drug flight.

Investigations by the State Department and the Senate criticized the
program as sloppily organized and supervised. Although an administration
review was completed last summer, and the White House has repeatedly
indicated it intended to reactivate the flights, it has not yet done so.
Sources in Washington have said the administration was still trying to
figure out how to respond to Senate demands that the CIA end its
involvement in the program and that the program be taken over by the U.S.
military or Customs Service.

Administration officials have said there were no signs that clandestine
drug flights have increased, and that reinstatement of the program was
important to Toledo and Colombian President Andres Pastrana as an
indication of U.S. support and trust.

Toledo, who holds a master's degree and doctorate from Stanford University
and is an internationally known economist, is Peru's first indigenous
president. He was elected last year, replacing an interim government put in
place after longtime President Alberto Fujimoro left the country in
disgrace following revelations of corruption and allegations of human
rights abuse.

Fujimori's former security chief, Vladimiro Montesinos, was a close ally of
the CIA. Montesinos is now jailed on corruption and human rights-related
charges, and the Peruvian government has complained of U.S. unwillingness
to declassify documents to help in his prosecution. Although Toledo planned
to raise the issue with Bush today, neither mentioned it at their news
conference.

Toledo greeted Bush at a Peruvian air force base next to the international
airport this afternoon with a full military honor guard, troop review and
21-gun salute. Bush sped through the streets of the Lima accompanied by
scores of motorcycle policemen to a meeting with U.S. Embassy staff before
heading to the presidential palace. He and Toledo, who have met twice
before, walked into the building with their arms around each other.

But while they announced several U.S. initiatives coming out of their talks
- - the resumption of a U.S. Peace Corps program in Peru, the establishment
of a teacher training program and a U.S. fellowship for Peruvian business
leaders - it was little compared to the languishing trade pact that Toledo
hopes will help diminish his country's double-digit unemployment rate.

Terrorism, and the drug trafficking that the Bush administration has
increasingly described as its close relative, were clearly the central
topics of discussion. The importance of the issue was underlined both by
the Wednesday bombing and an administration request to Congress last week
to expand U.S. military aid and training in Colombia - now limited to
anti-drug efforts - to that government's decades-long war against leftist
guerrillas. Both the U.S. and Colombian governments have labeled the
Revolutionary Armed Forces of Colombia, or FARC, as terrorists.

U.S. anti-drug assistance to Colombia over the last two years has totaled
nearly $2 billion. A much smaller program in Peru, about $150 million in
the current budget, is also limited to fighting drugs. But U.S. officials
here said this week there was "no question" that Washington would offer
immediate anti-terrorism assistance if it was determined that the Shining
Path was responsible for the car bombing. Although no Americans were killed
in the attack, agents from the FBI and the Bureau of Alcohol, Tobacco and
Firearms are here helping with the investigation.

Although some U.S. officials have suggested the FARC may have expanded its
efforts beyond Colombia's borders and was involved in the bombing, Toledo
said there was no evidence of FARC activity in Peru. But, he said, a number
of Peruvian military units were deployed along the Colombian border last week.

The status of the drug war throughout the region has been a major source of
administration concern. Peru, a country of 24 million people, was long one
of the top sources for the coca leaves used to make cocaine, largely
harvested for shipment to Colombia for refining. Peruvian coca cultivation
was slashed from 285,000 acres in 1995 to 84,000 acres in 2000 with
large-scale U.S. assistance. At the same time, wide areas of coca growth
were eliminated in Peru and Bolivia, although cultivation vastly increased
in Colombia, where the FARC, along with a right-wing paramilitary army, has
become deeply involved in its processing and export.

Now, Peruvian officials have expressed concern that coca growing may be
entering a new upswing.

The Andean governments have argued, and the administration has agreed, that
one of the best ways to stop cultivation of coca and opium poppies, the raw
material of heroin, is to provide more jobs. At the same time, Bush said
today, "the best thing America needs to do" to reduce drug exports from the
Andean region is to "to reduce demand" for them at home and "persuade
people to quit using them."