I won't talk to guerrillas, says Fujimori

President Alberto Fujimori continued a war of nerves yesterday with 22 Marxist guerrillas holding 340 hostages in the Japanese ambassador's residence, writes Phil Davison.

Speaking for the first time since Tuesday's attack, the Peruvian president said he had no intention of negotiating with the Tupac Amaru guerrillas, which he described as a "subversive group".

Mr Fujimori appeared intent on wearing the rebels down, keeping water and phone lines cut off at the building in Lima's residential San Isidro district.

The 38 hostages who were released on Friday night, described how they had slept on the floor and passed their time playing chess or dominoes. A videotape delivered to a TV station showed the red-masked rebels meticulously planning the attack with a scale model of the building.

Newspapers said their leader, Nestor Cerpa Cartolini, was directing the operation from a secret location, communicating with his men by two-way radio.

Close to 1,000 police and troops were in place in surrounding streets, with dozens of ambulances standing by.Rumours abounded of a military assault to end the drama. One spoke of an attack by a special Delta Force of commandos sent in from the US, but American diplomats denied the presence of any US forces.