By MONTE HAYES

Matucana's mayor is a worried man. The Shining Path rebels who terrorized Peru decades ago are back, moving across the jungle-draped slopes near his remote village and recruiting young fighters to their born-again insurgency.

And unlike before, the rebels have almost unlimited financial support. Earning cash by protecting coca fields and cocaine-smuggling routes, they are able to buy powerful weapons and pay salaries to men and women who take up arms against the government.

It is a nightmarish prospect for Peru, which saw nearly 70,000 people killed from 1980 to the mid-'90s in the Shining Path's brutal effort to impose a Maoist communist regime. Most of the victims were peasants, caught in the crossfire between guerrillas and security forces.

The country has enjoyed more than a decade of political stability since the rebel threat was virtually eliminated by former President Alberto Fujimori, a democratically elected leader who ruled with an iron fist from 1990 until his term ended in scandal in 2000.

Fujimori, 69, was extradited from Chile in September and is now on trial for human rights violations committed during his crackdown, including the killings of university students and the massacre of Lima tenement dwellers targeted as Shining Path collaborators by a military death squad.

But Fujimori remains a hero in the isolated valleys where the rebels drew the most blood. Matucana Mayor Florencio Velasquez, military officers and anxious villagers all praise the tough measures of the 1990s and say the government now is underestimating the threat posed by the rebels' resurgence.

Matucana is a six-hour trip from the provincial capital of Ayacucho over a rutted dirt road that twists down into the narrow Apurimac Valley, a no man's land of coca fields and cocaine production. Many of the village's 500 people grow coca along with legal crops like cacao and coffee.

''All the people here are tied to coca,'' said Gen. Raymundo Flores, who commands an army base in the valley. ``This is a narco-economy.''

Velasquez, Matucana's 40-year-old mayor, says coca is attracting the rebels to the area, but they come with a new message: We are your friends. We know we made mistakes in the past in attacking civilians. But you can trust us now. Join us.

Some people young enough to have escaped the guerrillas' brutality in their earlier incarnation have been drawn in by this gentle approach and by pay of about $20 a day, a princely sum in backwater villages. But Velasquez can't forget their savage attacks on communities that refused to join the Shining Path revolution.

''They say they are not going to kill, that they come peacefully to give political talks,'' he said, looking uneasily at the ground. ``And they tell us to keep planting coca. They say they will protect us against anyone who tries to eradicate it.''

The Shining Path -- Sendero Luminoso in Spanish -- came close to bringing Peru to its knees with its insurgency. Its founder, Abimael Guzmán, a former philosophy professor, had a messianic vision of a classless utopia based on communism.

His fanatical followers -- as many as 10,000 guerrillas at their peak -- bombed electrical towers, bridges and factories, assassinated mayors and massacred villagers. In one of their most barbaric attacks, they slaughtered 69 peasants, including two dozen children shot and hacked to death, in reprisal for the slaying of several rebels in the village of Lucanamarca in 1983.

''They killed them with machetes, stones, axes -- and for those who did not die in agony in this way, they even put them into a vat of boiling water,'' said survivor Ignacio Tacas, now 36.

Guzmán cared little about the loss of lives, preaching: ``Blood does not drown the revolution. It irrigates it.''

But Guzmán was captured in 1992, as Fujimori's security forces jailed thousands of rebels and suspected collaborators. By 1999 there were fewer than 200 armed fighters left in the Apurimac and Huallaga valleys, the only regions where the Shining Path remained active, and many Peruvians believed the movement was in its death throes.

The rebels' fortunes, however, changed after the capture that year of a top Guzmán lieutenant, an ideological purist who had opposed cocaine trafficking as a stain on the revolution.

The remaining guerrillas in the Apurimac Valley eagerly provided armed escorts to protect mochileros, smugglers who tote cocaine over mountain trails in backpacks.

The rebels spent their drug earnings on lightweight assault rifles and other more powerful modern weapons. And they began buying supplies in shops, unlike the past when small, desperate bands raided rural settlements for food and medicine.

After years in retreat, they again are on the offensive -- although still in numbers far below their peak in past decades.

''When I arrived 3 ½ years ago, Sendero carried out one attack. Now it's clear they can carry out an ambush each week. They have developed logistics, intelligence and local support -- all very dangerous,'' U.S. Ambassador James Curtis Struble said before retiring last year.

Backed by drug money, the rebels' numbers have quadrupled to nearly 800 in recent years, according to military officers, village militia leaders and Pedro Egoavil, 53, a former rebel commander who broke with the Shining Path in the 1990s over its violent strategy but retains friends inside the organization. The guerrillas also have hundreds of unarmed collaborators.

Interior Minister Luis Alva Castro, who heads the national police, and other government officials argue that today's Shining Path cares more about drug trafficking than its long-term goal of imposing a Maoist regime.

Flores, the army commander in the Apurimac valley, said the guerrillas now ``have fields deep in the jungle where Indian communities are forced to grow coca for them.''

But top military officers and other experts dismiss the idea that today's rebels have abandoned their ideology.

''They do ideological work, move through areas, gather people together in meetings, hand out flags and carry out attacks,'' then-Defense Minister Allan Wagner said last December. ``The revolution has not ended for them.''

Washington has supported Peru's war on a drug business that produces a quarter of the world's cocaine, second only to Colombia. Aid includes 23 helicopters to ferry police from U.S.-built bases in the Apurimac and Huallaga valleys on raids to destroy cocaine labs.

Police have been hit hardest in the renewed guerrilla attacks. Some 40 officers have died in ambushes in and around the Apurimac Valley since 2005. November saw the boldest raid in years: A column of 60 insurgents destroyed a police station and killed its commander in the mountain town of Ocobamba.

In response, the police have pledged to work in closer cooperation with the army, and Defense Minister Antero Flores Araoz has promised to increase military forces in the valley. But budgeting restraints have limited his plans.

Flores, the Apurimac valley army commander, complained that funding for troops to fight the guerrillas has been cut back in recent years even as the rebels grew stronger.

''Sendero remains a latent threat,'' he said after climbing from the single, aging Soviet helicopter that his base has for ferrying troops to battle rebels.

Village ''self-defense committees'' supported by Fujimori once fought the rebels and provided guides and intelligence for army units. Now, with both peasants and rebels involved in the drug trade, the militias are not always on the soldiers' side.

Police seized a revolver and three shotguns during a recent raid on a cocaine lab in the village of Villarrica -- weapons that, it turned out, had been assigned to the village militia.

Walter Aguilar, 47, a militia leader from the town of Quimbiri, blames such incidents on new arrivals to the valley who have joined self-defense committees. He said the Shining Path tortured and killed his father and several other relatives and insisted militia fighters who suffered such experiences would never cooperate with the rebels.

''We have spilled blood. We have lost family,'' he said, showing an ugly bullet scar on his left forearm from a rebel ambush. ``We could never be the allies of those criminal terrorist groups.''

Fujimori is accused of murder and kidnapping for allegedly authorizing a military death squad to fight the rebels. But his defenders here say his arming of the militias enabled them to regain control of their lands, in vicious fighting that claimed 8,000 lives in the Apurimac valley alone.

Jose Luis Farfan, 33, a militia leader in the jungle village of Triboline, complained bitterly that the militias have been abandoned by the governments that followed Fujimori's regime.

''Thanks to him we were able to rid ourselves of that curse,'' Farfan said, holding one of 12 Winchester repeating shotguns the village received from Fujimori years ago. ``But now they're stronger than ever, with good arms.''

Experts on the Shining Path see other ominous developments in Peru's cities, key to the rebels' support 20 years ago. They worry that rebels who have completed prison sentences have returned to clandestine political organizing in labor unions and universities and that pro-Shining Path rhetoric is allowed to flourish under the protection of free speech.

Hector Jhon Caro, who once led Peru's anti-terrorism police, said such attitudes are dangerously reminiscent of the early years of the insurgency. The government, he warned, ``still doesn't understand the potential danger of letting remnants of the Shining Path remain active.''

Anti-terrorism police aren't bothering to keep tabs on released rebels, Jhon Caro said. Even more worrisome, he and other experts on the movement said, Guzmán has regained the right to hold private meetings with his lawyer -- and thus to communicate with his followers -- after years in isolation during Fujimori's regime.

Guzmán, unrepentant at 73, still has a long-range strategy for taking power, the experts said. And he's working to bring errant jungle columns back under his control, said Egoavil, the former rebel commander.

''They all recognize the leadership of Abimael Guzman,'' he said. ``They are beginning to accept it. They are coming together.''

Associated Press writer Monte Hayes has covered the rise, fall and resurgence of the Shining Path during his 23 years in Peru.