The scene left millions of Peruvians in stitches. As of the weekend there was still no sign of the quarry, the sacked intelligence chief Vladimiro Montesinos, 56, once the president’s closest counselor. And, tellingly, Montesinos’s strongest allies remained in control of the Army. That amused few Peruvians. Observers remarked that the president was either unwilling or unable to touch Montesinos and his men–impotent or afraid. “He is trying to show people he’s still in charge,” says magazine columnist Fernando Rospigliosi, “but people don’t believe him anymore… Fujimori is losing his grip.”

The question is how long he can keep his job. Barely three months ago the president seemed unstoppable. He had won an unprecedented third term with Montesinos’s help, and nothing could faze him. He blandly denied public charges of massive vote fraud. He ignored the noisy threats of national strikes and international sanctions. And he prevailed–until September, when local TV aired a videotape of Montesinos handing an apparent bribe of $15,000 to an opposition legislator. The ensuing outcry achieved the impossible, forcing Fujimori to announce that by next July he would hold a new election and step down. In the process, the president also fired Montesinos and promised to disband the intelligence unit he had headed. The ousted spymaster fled the country and holed up briefly in Panama (box).

Last week Montesinos deepened the crisis by flying home. Many Peruvians blamed Fujimori, fairly or not, for failing to keep him out. The first vice president (Peru has two), Francisco Tudela, promptly quit in protest, and two congressmen bolted Fujimori’s party, which soon split into rival factions. As if he hadn’t caused enough trouble already, Montesinos gave a rare interview to a Lima radio station, claiming Fujimori had given him permission to return.

Coup rumors flew all week. With Montesinos’s friends and former classmates still dominating the military’s top ranks, some Peruvians worried that he continued to control key parts of the armed forces. Fujimori tried to allay such fears. Demonstrating his power over the troops–and just to be safe–he confined all military personnel to their barracks until further notice and removed Montesinos’s brother-in-law, an Army general, as commander of the armored division headquartered in Lima. He also arrested a few officers close to Montesinos. But he let them go just as quickly.

Military experts insist the generals have chosen to back the president. “The top command has decide to separate itself from Montesinos,” says Daniel Mora, a retired Army general. U.S. officials believe Fujimori is safe. “I really don’t think there’s any danger of a coup,” said one senior American. Still observers speculated that Fujimori is afraid to act aggressively, for fear that Montesinos may spill state secrets or embarrassing personal details he knows from his 10 years as the de facto head of intelligence–nuggets like whether Fujimori was born in Japan, as some opponents claim and he denies, disqualifying him from the presidency.

Meanwhile, the president scrambled to cut his losses. For weeks his representatives had been haggling with opposition leaders over the precise terms for a new election. Fujimori was trying to delay it as long as possible. And in exchange for his stepping down he wanted a sweeping new amnesty law, granting immunity from prosecution to both military and civilian officials for a wide variety of crimes, including drug trafficking. Last week the president suddenly caved in, dumping the amnesty demand and agreeing to hold the vote no later than April 8. The U.S. State Department applauded Fujimori’s unexpected concessions, calling them a “significant advance” toward the restoration of democracy.

The amnesty issue won’t go away so easily. Political analysts say the generals are sure to push Fujimori for broad legal protection, as payment for staying out of the Montesinos standoff. They have reason to worry. Human-rights activists are demanding the creation of an independent truth commission to investigate atrocities committed since 1980 in the two-pronged civil war against the leftist Tupac Amaru rebels in the slums and the vicious Shining Path in the countryside. No matter what the Army wants, though, Fujimori can’t deliver an amnesty law without opposition support. And that’s something he can’t expect much of right now. “Amnesty laws should not be made by a government on its way out,” says opposition politician Jorge del Castillo. “They should be made when a new government is coming in, to clear the air.”

Peru’s air is overdue for a thorough scrubbing. Fujimori has always accepted without question his intelligence chief’s denials of any involvement in massacres, corruption, arms trafficking and links to drug lords. The two have been inseparable partners since 1990. Montesinos, a lawyer who specialized in defending drug traffickers, had been drummed out of the Army in the mid-1970s for allegedly spilling state secrets to the CIA. Fujimori, a bookish political novice, seemingly had no chance of winning the presidency–but he became unbeatable after he joined up with Montesinos. In the years after Fujimori’s long-shot victory they dissolved Congress, suspended the Constitution and trampled other democratic institutions in Peru, with barely a whimper of protest from the international community. Eventually Washington had enough, though. U.S. officials began suspecting Montesinos of being connected to a ring of arms dealers responsible for smuggling thousands of AK-47 assault rifles to the hemisphere’s largest remaining leftist guerrilla army, the Revolutionary Armed Forces of Colombia (FARC).

That unproved allegation may be the least of Montesinos’s worries. By last weekend seven separate criminal complaints had been filed in Lima, charging him with murder, torture and money laundering, among other crimes. “We are not engaging in a witch hunt,” insists Sofia Macher. She heads the National Coordinating Office on Human Rights, which submitted one of the seven complaints. “But we have to find out what [abuses] were committed.”

The president will have to figure out his next political move without his former adviser. It’s scarcely a cheerful prospect. Until last week Fujimori had at least some hope of making an eventual comeback. Under the Constitution he helped rewrite, the president could step down next year and still be eligible to run again in 2005. Now the thought of such a run seems like another bad joke. The bumbling Fujimori on television last week was a far cry from the ruthlessly efficient autocrat who stared down Congress and broke the back of the Shining Path guerrillas. “He’s done a lot of good things, says Jose Ponce de Leon, a working man in the streets of Lima. “You can’t take that away from him. But he’s discredited himself. All he cared about was winning the next election.” It seems increasingly certain that Fujimori has won the last election of his political career.