BY KEVIN G. HALL AND JAMES KUHNHENN
                      Herald World Staff

                      LIMA, Peru - President Bush and President Alejandro Toledo of Peru pledged Saturday to join together in a war
                      against terrorism and drug trafficking in the Andean region.

                      ''The world has called us into action,'' Bush said. ``This is a new era.''

                      Unprecedented security greeted Bush on Saturday as he met with Toledo and other Andean leaders in Peru, where
                      days earlier a bomb exploded across the street from the U.S. Embassy and pushed terrorism to the top of the agenda.

                      Bush, the first sitting U.S. president to visit Peru, brainstormed with the leaders of Peru, Colombia, Ecuador and
                      Bolivia about expanding trade, coordinating anti-terrorism efforts and curbing drug flows. But the Wednesday car
                      bomb, which killed nine, put Peruvians and the U.S. government on edge.

                      Bush and Toledo noted their kinship on terrorism, with Toledo recalling how his breakfast was shockingly disrupted
                      as he watched the Sept. 11 terrorist attacks in the United States unfold on television. Noting Peru's two bloody
                      decades of fighting domestic terrorism, he added: ``We are not only partners in conviction, but we ourselves
                      have experienced it.''

                      No one has claimed responsibility for Wednesday's bombing, though it is widely believed to be the work of Peru's
                      Maoist Shining Path guerrilla movement.

                      The two presidents, dressed nearly identically in gray suits and powder blue ties, reacted warmly to each other.
                      Toledo observed that while he and Bush are the same age -- 55 -- Bush seems younger. Bush quipped, in a
                      mixture of Spanish and English: ''We may be the same age, but he has black hair,'' referring to his own ''pelo
                      gris,'' gray hair.

                      BUSH `IMPRESSED'

                      Toledo called Bush ''mi amigo,'' and Bush said he was ''impressed'' and ''inspired'' by Toledo's leadership.

                      With sharpshooters perched on rooftops and heavily armed soldiers and police lining every corner, terrorism
                      couldn't help but dominate a joint news conference. But anti-drug efforts were not far behind.

                      Bush offered condolences over the attack and announced $195 million in assistance for Peru this year, a threefold
                      increase; $75 million of it would go toward counternarcotics and security.

                      He also stressed that curtailing drug trafficking requires cutting back production, but also reducing demand in the
                      United States.

                      ''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.''

                      Toledo, skirting a question about his specific commitments 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.

                      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 promise to keep working on those issues.

                      Bush and Toledo made a 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 range of products.

                      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.

                      Although the Bush administration has completed a review of the program and has repeatedly indicated it intended
                      to reactivate the flights, it has not yet done so.

                      Colombia, Peru and Bolivia, the world's leading growers of coca, also want Bush to open U.S. markets to their
                      farm products to provide alternative crops to coca growers.

                      PEACE CORPS RETURN

                      Among the panoply of other bilateral initiatives that Bush touted Saturday was the reestablishment of the Peace
                      Corps in Peru -- 27 years after its presence was ended by an anti-U.S. regime. The first of the Peace Corps
                      volunteers are expected back in August.

                      Bush also said the U.S. Aid for International Development will work to create centers to improve teacher training
                      in Peru and Colombia. Also, the president said he has directed the Commerce Department to start ''E-Business''
                      fellowships for Peruvians.

                      Shortly before Bush's arrival, a few dozen leftist protesters, some waving 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.

                      Herald wire services contributed to this report.