U.S. backed strongman, Alejandro Toledo, authorised the military to use brute force to crush the upsurge and maintain control in the country's second largest city, after widespread anti-capitalist demonstrations and street battles.

The protests were not just over the privatisation of two state electricity companies as the corporate media has dished out.

Toledo said he would not bow to the protesters' demands, and pledged to continue with his disasterous neoliberal policies drafted by his master the United States of America.

"It's not true that the privatisation goes against the needs of the people of Arequipa," "It's not true that capitalism is bad"
Toledo insisted in a televised address on Sunday.

According to official estimates a total of 66 people have been injured.

"As president and governor of true Peruvians, I appeal tonight for obedience, calm and responsibility," he said.

The dictator estimated that 350m soles ($100m) worth of damage had been caused in the revolutionary upsurge, which began on Thursday and is expected to continue.

Thousands crammed into the city's main square over the weekend, for demonstrations that were broken up by police with tear gas and brute force.

Protesters expressed their proletarian anger by
vandalising the airport, smashing landing lights and taking equipment. All flights were cancelled with a few North American tourists and missionaries being evacuated by the military.

The Red Cross said 66 people - including 24 police officers - had been injured since the protests began, and a man was brain dead after being hit in the head with a tear gas canister by police.

Uncle Sam's man in Peru

The militant demonstrators are not just protesting against the government's decision on Friday to sell off the state-owned utility companies Egasa and Egesur.

According to the corporate media, they accuse Mr Toledo of reneging on a pledge not to sell them, made during last year's election campaign.

Although privatisation is only part of Toledo's disasterous neoliberal economic policy, it is just one issue that has come to haunt him like most U.S. puppets in Latin America, whose current poll rating is below 20% according to conservative estimates.

Revival of communist insurgency

The revolutionary upsurge follows the arrest of three suspected Marxist rebels blamed by the government for a car bombing outside the U.S. Embassy in March, three days before a visit by the boss himself, George W. Bush.

Toledo said the suspects, two of whom were women, were "directly" involved in the bombing. "They're being interrogated in prison right now, but there is no doubt that they all participated in this criminal attack," he said. "Interrogation", in the land of Washington's School of the Americas.

The bombing heightened already simmering fears by the government that the communist revolutionary organisation, the Shining Path or Sendero Luminoso in spanish, has gone nowhere and still has strong support amongst Peru's poorest.

The boss went ahead with his visit to Peru despite the bombing.

The women were longtime members of the Shining Path insurgency, according to military reports.

They warn that other members of the "small group" who plotted the attack were still at large.

The arrests "do not rule out in any way the possibility that the remnants of this fanatical terrorist group could eventually carry out other attacks. But we will kill anyone who terrorises this country and threatens the existing order" an anonymous military spokesman said.