Peru Balks at Drug Plan Unless U.S. Boosts Aid : Summit: With White House signaling it won’t agree to terms, seven-nation meeting could miss its goal.

On the eve of a seven-nation drug meeting, Peru has refused to go along with a U.S.-backed plan calling for sharp reductions in cocaine supplies unless the United States provides more money for the counternarcotics fight, senior Administration officials said Wednesday.

The demand puts President Bush in an awkward position, because his Administration is under attack by critics who say that the U.S. war on drugs already subsidizes Peruvian corruption and brutality.

With the White House signaling that Bush will not agree to President Alberto Fujimori’s condition, the Peruvian stance appears almost certain to sweep away what was to have been the centerpiece of the meeting here.

The plan, introduced by Colombia and supported by the Administration, called for the United States and six Latin American nations to agree to a 50% reduction in the supply and demand for drugs by the end of the century. But with Fujimori complaining publicly Wednesday that it would be “unrealistic” to set goals under current U.S. funding levels, Administration officials said they have little hope that a declaration to be issued today can include specific targets.

Although U.S. officials sought to play down the potential for embarrassment, the squabble at the outset of the San Antonio meeting draws attention to what has been the U.S.-led campaign’s most troublesome front.

Under fire for drug-war disappointments that have cast doubt on his pledge that “this scourge will end,” Bush had hoped to inoculate himself against election-year criticism by portraying himself once again as leader of a noble cause.

Instead, the meeting is likely to highlight the limits of a multinational effort and to give Latin leaders like Fujimori a forum for attempts to extract from Bush new pledges of costly--and potentially unpopular--new support.

In a private meeting between the two leaders, Bush assured Fujimori that he would urge Congress to release about $25 million in military aid to Peru that remains blocked on human rights grounds, Administration officials said.

Against a new tide of concern that counternarcotics aid to Peru will find itself entwined with that government’s harsh war against Shining Path guerrillas, however, it remained far from certain how hard Bush would be willing to pressure a resistant Congress.

And Fujimori, whose nation produces 60% of the world’s coca supply, made clear that he expects military and economic assistance in amounts well beyond what the United States has promised. And he criticized in sharp terms an Administration policy that he said expects too much. “It is not possible to have goals if the finances are not assured,” he said at a news conference here.

A U.S. official insisted that the Administration “could take or leave” the specific target of a 50% drug-reduction goal that was to have been included in today’s declaration.

Seeking to put the best light on what is expected to be a watered-down agreement, the senior official insisted that “this summit was never really about numbers.”

But another high-level source acknowledged that the 50% target had been put forward by Colombia with U.S. backing and conceded that its rejection by Peru could put the Administration in an uncomfortable position.

The likelihood that the meeting would fall short of what some had hoped comes at a time when critics have begun increasingly to point out that the Administration’s five-year $2.2 billion anti-drug effort in the region has failed to meet its own goals.

Far from decreasing under the effort, known as the “Andean strategy,” cocaine production has increased over the last two years. The Administration, however, cites improved law enforcement and interdiction efforts as indications that it is making progress in a prolonged fight.

Meeting Fujimori at the outset of the summit, Bush vowed that the nations involved will “redouble our efforts” and said that the session will help to secure “maximum cooperation.” Besides the United States, Peru, Colombia and Bolivia--all nations that participated in the original summit--the heads of state of Ecuador and Mexico are also attending.

Venezuelan President Carlos Andres Perez could not attend because of domestic troubles in the wake of the recent coup attempt in his country but sent a representative.

Much of the $135 million in U.S. military and economic assistance designated for Peru in the current fiscal year has been held up by Congress because of allegations of human rights abuses, with the first $10 million in military aid freed up for the first time last month.

In his meeting with Bush, Fujimori was said by U.S. officials to have complained bitterly about being held accountable by Congress for human rights abuses when his government’s guerrilla opponents are far more serious offenders.

Officials indicated that Bush listened sympathetically to Fujimori’s complaints as he vowed to press Congress to release the aid and to seek a proposed doubling of military aid to Peru next year.