Peru’s President Rules by Decree : South America: Fujimori holds congressional leaders prisoner, censors news. The U.S. calls the move a ‘regrettable step backwards’ and suspends aid program.

Wielding newly seized dictatorial powers Monday, President Alberto Fujimori and the Peruvian armed forces held top congressional leaders prisoner, censored the news media and surrounded key locations with troops and tanks.

Fujimori stunned the nation late Sunday by announcing an “emergency” government with military support. He closed the Congress and courts and suspended unspecified constitutional guarantees.

The commanders of the armed forces and national police pledged their “decided backing and support” for the move. It was what Latin Americans call an auto-golpe, a “self-coup,” and it was the first reversal of a democratic trend that has filled the continent with elected governments.

The U.S. government deplored the change as a “regrettable step backwards” and suspended its aid program to Peru.

“This is a coup d’etat, “ former President Fernando Belaunde Terry said in a telephone interview.

“The president of Peru does not have the constitutional power to close the Congress,” Belaunde said. “Therefore, Mr. Fujimori has stopped being constitutional president by his own decision and has become a dictator.”

The “irregular situation” will not last long, Belaunde said, but he added that he did not know how it would end.

Peruvians in general reacted to the coup with calm, but a group of congressmen tried to gather for a meeting Monday evening in the Bar Assn. headquarters. Police and army forces moved in to block the entrance, and a melee broke out.

At least one lawmaker, independent Sen. Raul Ferrero, was beaten with nightsticks.

Early Monday, security forces surrounded the home of former President Alan Garcia, but he reportedly took asylum in a foreign embassy.

Senate President Felipe Osterling and Roberto Ramirez del Villar, president of the lower house, were under house arrest. Both are members of Garcia’s opposition APRA party.

Garcia was president from 1985 to 1990, when Fujimori took office as the third elected president since the armed forces relinquished power in 1980.

Among other APRA members detained were Augustin Mantilla, who was Garcia’s interior minister; Myrta Larrauri, Garcia’s secretary, and Sen. Abel Salinas.

Police agents detained Gustavo Gorriti, a prominent journalist, at 3 a.m. Monday and seized his computer, disks and documents. Gorriti is writing the second volume of a book on the Sendero Luminoso, or Shining Path, a Maoist guerrilla movement that has waged war on the government since 1980.

Foreign Minister Augusto Blacker said Gorriti “had information he should not have.” Blacker said the journalist would be released today.

“Gustavo had nothing regarding classified documents,” said Gorriti’s wife, Esther.

Newspapers appeared Monday with the full text of Fujimori’s announcement, which was televised late Sunday, and the supporting “Official Communique No. 001” from the armed forces. The papers were permitted to publish no critical comments.

The daily newspaper La Republica came out with three blank pages, showing where censors had excised material. Authorities temporarily shut down one radio station.

Fujimori spent all morning in meetings at the army’s headquarters. His government palace, as well as the closed Congress, the Justice Palace and other public buildings were heavily guarded by troops and tanks.

In a live television broadcast Monday evening, Fujimori swore in a reshuffled Cabinet. Alfonso de los Heros, minister of labor and prime minister, was the only member replaced.

Military officers remained in the ministries of Defense and Interior, and the other ministers were civilian.

The Bush Administration, denouncing the 53-year-old Fujimori for grabbing unlimited power, suspended a quarter-billion-dollar-a-year aid program to the Andean nation Monday.

“This is a regrettable step backwards for the cause of democracy in the hemisphere,” the White House said in a written statement. At the State Department, spokesman Richard Boucher said the Administration has demanded that Fujimori reverse his actions.

Bernard Aronson, U.S. assistant secretary of state for inter-American affairs, who arrived in Lima on Sunday on a previously planned visit, decided to return at once to Washington. Aronson refused to keep an appointment with Fujimori.

Fujimori’s action, coupled with last year’s coup in Haiti, upsets one of the Administration’s proudest claims--that every country in the hemisphere, except Cuba, had become a democracy. The seizure of power also cripples U.S. efforts to combat the drug trade in Peru, the world’s largest producer of coca leaf, the raw material for cocaine.

“The United States calls for the full and immediate restoration of constitutional democracy, which must include immediate freedom for those detained and full respect for human rights, immediate restoration of a free and independent press and civil liberties, and immediate restoration of independent legislative and judicial branches of government,” Boucher said. “Any needed reform in Peru’s democratic institutions must be pursued within a legal constitutional framework.”

Boucher said Fujimori had no justification for “the detention of opposition politicians and legislators and the seizure of the news media.”

“While we recognize that President Fujimori inherited severe problems, we believe that these problems do not justify nor can they be resolved through unconstitutional means,” Boucher added.

The White House said that all aid programs to Peru will be “reviewed.”

Boucher said that about $45 million in economic and military aid for the fiscal year that ended Sept. 30 has not yet been disbursed to Peru. The total appropriation for last year was $237 million. For the current fiscal year, the Administration requested $275 million for Peru.

The total appropriation for last year included $193 million in economic aid, $24.5 million in anti-narcotics-related military aid, and $19 million for other anti-narcotics programs.

In his televised speech Sunday night, Fujimori accused Peru’s Congress of “blocking the action of the government aimed at the goals of national reconstruction and development.” He also accused unnamed political parties of obstructing his economic measures.

Fujimori has feuded with the Congress and the judicial system since coming to power, accusing them of corruption and irresponsibility. Former President Garcia’s APRA party has strong influence in both of those government branches.

Fujimori said the new “Emergency Government of National Reconstruction” will be transitional, but he gave no timetable for its duration. He said its goals include changing the constitution to provide new legislative and judicial structures, “pacifying the country” through the use of “drastic sanctions against terrorists and drug traffickers” and eradicating corruption from public institutions.

He also set goals of more rapid economic and social development.

Promising a plebiscite on constitutional changes, Fujimori said legislation in the meantime would be issued by his Council of Ministers.

For more than a decade, Peru has suffered an escalating campaign of terror and sabotage by the Sendero Luminoso, the most radical guerrilla movement in the Americas. About 25,000 Peruvians have died in the political violence, which has undermined the national economy and helped deepen widespread poverty.

On another front, Fujimori has faced unyielding opposition from Garcia and his APRA party. The Supreme Court this year cleared Garcia of corruption charges leveled by Congress.

Analysts have said Garcia was strongly positioned for election to a second term in 1995. Francisco Tudela, deputy director of the Catholic University’s Institute for International Studies, said Monday that the Sendero Luminoso and APRA were the main targets of Fujimori’s move to close Congress.

“I think the coup is 50% anti-terrorist and 50% anti-APRA,” Tudela said in an interview.

APRA has blocked Fujimori’s efforts to privatize money-losing government enterprises. Tudela observed that the government subsidized its companies’ losses of $3.5 billion in 1991, while the army received only $60 million to fight subversion.

After a swift rise from obscurity, Fujimori--a former university professor and the son of Japanese immigrants--came to the presidency two years ago. Capitalizing on voter anger against traditional politicians, he beat rightist novelist Mario Vargas Llosa for the presidency and succeeded social democrat Garcia as the nation’s leader.

As president, his formula was economic austerity, a hard line on guerrilla violence and a growing military presence in the civilian government.

He has lowered inflation and restored his country’s standing with international creditors, but living standards have fallen, and Peru was already one of Latin America’s poorest countries.

Times staff writer Norman Kempster in Washington and special correspondent Adriana von Hagen in Lima contributed to this article.

An Economy in Turmoil

President Alberto Fujimori’s economic policies have helped cut four-digit inflation. But the economy has tumbled into a recession under strict measures designed to balance the budget. Here is a look at the government and the economy: Capital: Lima Government: According to its constitution, Peru is a parliamentary democracy with a president elected every five years Armed forces: 118,000 troops Population: 22 million Per capita income: $850 Total foreign debt: $22 billion Inflation 1991: 139% 1990: 7,650% Main exports: Copper, zinc, lead, silver and fish meal (used in animal food and fertilizer) Industries: Apart from textiles, there is little industry. Tourism is also an important earner U.S. aid (*1991): $237 million *About $45 million of the military and economic aid has yet to be disbursed. Source: World Factbook, 1991; Reuters