BY LUCIEN O. CHAUVIN
 Special to The Herald

 LIMA, Peru -- Presidential candidate Alejandro Toledo announced Thursday that
 he would not participate in the May 28 runoff election against President Alberto
 Fujimori, who has been accused of trying to commit electoral fraud in an
 unprecedented effort to win a third consecutive term in office.

 Toledo said conditions do not exist for free and fair elections at the moment and
 demanded a postponement of at least three weeks.

 ``We have asked the National Election Board to postpone the elections to June
 18, which will allow for a runoff election in much more equitable conditions,''
 Toledo said. ``We will not participate in the elections set for May 28.''

 He added that the extension he is requesting does not mean that he will definitely
 run in June. He said he ``will not participate in any fraudulent electoral process.''

 Toledo's announcement came only hours after the Organization of American
 States election observer mission in Lima gave the government an ultimatum to
 address ``insufficiencies, irregularities, inconsistencies and inequities'' in the
 electoral process. The mission said that if the government did not solve a list of
 problems by Monday, it would lose OAS support.

 The failure to win the endorsement of the OAS would represent a major setback
 to Fujimori's efforts to regain a measure of credibility as a democratic statesman.
 Ever since he engineered a so-called ``self-coup'' in 1992, abolishing Congress
 and writing a new constitution to allow presidential reelection, his democratic
 credentials have been widely questioned, both domestically and internationally.

 Toledo's sudden decision to withdraw also throws the Peruvian political process
 into chaos. Without a viable candidate to compete against -- even one who took
 himself out of the race -- Fujimori's reelection would be seen by many as a
 charade.

 Toledo said keeping Peru free from political tension is up to Fujimori.

 ``I hope that President Fujimori and Peru 2000 [the president's campaign
 movement] have the courage not to allow the country to be pushed to the razor's
 edge and a climate of political instability,'' he declared.

 BEST SCENARIO

 Eduardo Stein, former Guatemalan foreign minister and head of the OAS mission,
 said the best possible scenario would be postponing the elections because his
 group did not have time to verify the different components of the election.

 Fujimori, addressing a massive campaign rally in the southeastern city of
 Ayacucho on Thursday, dismissed accusations of fraud and said the vote would
 proceed as scheduled. ``We will go to the polls on May 28. No one is going to
 change the will of the people,'' he said.

 He made the comments hours before Toledo withdrew from the race.

 With the scheduled balloting only 10 days away, Peruvians remain evenly divided
 between the two candidates, with recently nationwide polls giving each man 46
 percent support.

 Toledo began threatening to withdraw from the race in the days immediately after
 the first round of voting.

 In the first round, April 9, Toledo received 40.15 percent of the votes compared
 with 49.89 percent for Fujimori. The president came up only 15,000 votes short of
 winning the presidency and avoiding a runoff.

 MAINTAINS FRAUD

 Toledo, a 54-year-old, U.S.-trained economics professor, has maintained that
 Fujimori's near victory was the product of fraud and demanded that the conditions
 for the second round change radically.

 Among the key issues are government control of access to the media, the use of
 state funds to finance Fujimori's campaign and manipulation of the electoral
 agency's software to ensure a third term for the president.

 While the first two problems are troubling -- government spending in March, for
 example, increased 26 percent over the previous year; and while Fujimori's rally
 was carried on state television, Toledo's press conference was not -- it's the issue
 of the computer system that has Toledo and the election observers doubting the
 possibility of fair elections May 28.

 In the first round of voting, the computer system registered more than one million
 more votes than voters, and the number of votes for some opposition parties
 actually went down as the number of ballots counted increased. The National
 Electoral Processes Office agreed to implement a new system in the face of
 international pressure.

 NOT ENOUGH TIME

 Stein says his team needs at least three weeks to verify the election agency's
 new computer system. As of Thursday, the OAS had yet to receive a complete
 copy of the software, and Stein said it's ``technically impossible to audit the new
 computer program'' in the time remaining before the vote.

 Percy Media, a representative of the local election-monitoring group
 Transparency, says at least 80 percent of the observers' recommendations to
 improve the computer software ``have not been met.''

 Luis Nuñes, head of the Carter Center-National Democratic Institute team in Peru,
 says any change in the date of the election depends on the political will of the two
 parties.

 ``If both parties agree that postponing the election would improve the process,
 particularly the technical aspects, then I think the election board will listen. The
 election board needs to break out of its straitjacket and consider different
 options,'' Nuñes said.

 Fujimori's supporters dismiss the need to postpone the elections.

 Francisco Tudela, Fujimori's vice-presidential candidate, says Toledo's backers
 are acting like spoiled children, trying to see how far they can push the limits.

 ``They remind me of little boys who poke a stick into the spokes of a bicycle to
 see what might happen,'' he said.