OAS chief battles to stem Peru crisis

Members of the Organization of American States (OAS), from left to right, Eduardo La Torre, Peter Bohem, Secretary General Cesar Gaviria, and President Alberto Fujimori on Wednesday during a meeting at the government palace in Lima, Peru

LIMA, Oct 25 (Reuters) -- Latin America's top diplomat plunged into Peru's fast-escalating political crisis on Wednesday, meeting with President Alberto Fujimori as pressure built on the region's longest-serving president to quit.

Cesar Gaviria, head of the Organization of American States (OAS), arrived at the presidential palace for the first of an intense day of talks amid growing fear that Fujimori may not have the military loyalty needed to rule.

Fujimori said his brief, 30-minute meeting with Gaviria -- alongside military leaders -- was "pleasant." He stressed early elections would be held next year as promised, and reins of power would be passed in a "peaceful, orderly" manner.

"I again reiterate that the transition should be peaceful, orderly and it should begin a new period characterized by the strengthening of democratic institutions," Fujimori said in an address to the nation broadcast on radio and television.

RESOURCES Alberto Fujimori pictoral timeline: a decade in power   MESSAGE BOARD Peru in transition     ALSO Peru's ex-spy chief says he wants out of political intrigue

But Fujimori made no mention of a pivotal government proposal to grant elections only in return for sweeping amnesty for officials accused of human rights abuses, which sparked a collapse in talks with opposition leaders on Monday.

Gaviria's main goal was to restart the talks. But opposition leaders said Gaviria must bluntly tell Fujimori his time is up.

"I think he has to give him an ultimatum," said Solidarism Nacional congressman Cesar Acuna.

Critics branded the amnesty measure "blackmail," and said it was crafted to appease powerful ex-spy chief Vladamir Montesinos -- who returned on Monday from a failed exile bid in Panama and is thought to control top brass.

Montesinos sparked the five-week-old crisis when a video surfaced showing him apparently bribing an opposition lawmaker. Cornered by the scandal, Fujimori responded by announcing he would call elections four years early and step down in July.

Although Fujimori rejected calls for him to resign immediately and said he was in control of the military, Montesinos' return heightened uncertainty.

"Who the hell is in charge in Peru, for God's sake?" Alejandro Toledo, the main opposition leader, asked thousands of supporters at a rally in the northern jungle city of Iquitos.

According to government congressman Jorge Polack, Fujimori personally arrested three army officers -- one of them in a supermarket -- on Monday.

Polack told Reuters the president "took the trouble to capture them and bring them hooded and handcuffed" to the government palace, where they were being held.

Montesinos emerged briefly from the shadows for a rare radio interview in which he said he came home because his life was in danger. He indicated he was in Peru to stay, denied charges of rights abuses and vowed to keep out of politics.

Meanwhile Fujimori, abandoned by his deputy, who quit on Monday, was a flurry of activity -- stoking fears of a mad-scramble for control.

After three Cabinet meetings in two days, an afternoon running between military bases and a night spent in the headquarters of the notorious intelligence service, which Montesinos ran, he made a lightning trip, with no explanation, to the military base in Pisco, south of Lima, where the former spy chief landed early on Monday.

Fujimori-watchers said he appeared unusually agitated.

Fujimori is widely credited for freeing the Andean nation of 25 million people from the grip of leftist-rebels and drug lords, but the same authoritarian streak that allowed for peace in Peru has fueled opposition to his continued rule.

The OAS demanded Fujimori make sweeping reforms of the government-controlled news media, courts and judiciary, which allowed him to hold near-absolute power over the past 10 years.

Fujimori has agreed, but now only in return for amnesty -- casting doubt over his plans for elections next April.

The amnesty would guarantee government and military officials protection from prosecution for human rights abuses during Peru's war on drug lords and leftist rebels.

Although a coup looked unlikely, analysts said the military chiefs had no intention of backing down on the amnesty.

"Fujimori is theoretically head of the armed forces, but in reality he is a hostage to them. We're looking at a coup in disguise," Martin Belaunde, dean of Peru's college of lawyers, told CPN radio.

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