Mr Fujimori said preliminary talks with Tupac Amaru guerrillas occupying the Japanese ambassador's residence in Lima would begin soon, with mediators from Canada, Japan, the International Red Cross and the Catholic Church. But his refusal to bow to the rebels' main demand - for the release of 400 jailed comrades - suggested the drama could drag on for weeks. And he warned that if any of the 72 hostages fell ill, he would consider storming the building. Mr Fujimori is to meet the US Secretary of State, Madeleine Albright, in Washington today to brief her.
After the 90-minute summit meeting in Toronto, Nestor Cerpa, the leader of the Tupac Amaru guerrillas in the residence, said deadlock continued because they were sticking to their demand for the release of prisoners, while Mr Fujimori had ruled it out.
Diplomats in Lima, however, said Mr Cerpa's tough line may have been for public consumption while, in informal contacts with the authorities, the rebels may be prepared to settle for the release of some leading prisoners or simply better prison conditions. The Tupac Amaru's spokesman in Europe, Isaac Velasco, said yesterday: "We have said from the beginning that our global position is negotiable. We are not going to maintain our global proposal 100 per cent." This appeared to suggest Mr Cerpa, a former textile- union negotiator, might bargain with the government to find a way to get his 14-strong guerrilla unit out of the siege alive, to a jungle hide- out or a country such as Cuba.
In interviews yesterday, Mr Fujimori said that, in the agenda for the coming talks, the rebels had agreed not to mention the demand for the release of their jailed comrades. "For us this is an advance," he said.
Saturday's Toronto meeting was the first time Mr Fujimori and Mr Hashimoto had met since the rebels stormed a diplomatic garden party on 17 December. They apparently chose Canada because its ambassador to Lima, Anthony Vincent, will be on the mediation team and so that neither would be seen to be losing face.
Mr Hashimoto had expressed concern that Mr Fujimori may be leaning towards a military solution.
The Japanese Prime Minister strongly criticised provocative police manoeuvres outside the besieged compound last week, when police taunts led the rebels to fire at an armoured police vehicle.
In Toronto, Mr Fujimori admitted the police actions had been "inappropriate."
But he added: "To the extent that there is no harm to the hostages, no force will be used. But if a single hostage or several hostages are taken ill, that would not satisfy the conditions I have set."
With the siege about to move into its eighth week, the chances of hostages falling sick are growing rapidly.