It started as a simple promotion. Peter Pan Trailways figured it could fill its buses with a temporary $9.95 one-way fare from Washington to New York. That was last Friday.

Across the street, at the Washington terminal of Greyhound Lines Inc., officials acted quickly. By Friday afternoon, they cut their one-way fare to New York to $9.

By Monday morning, Peter Pan was charging $9 too.

"This is war," said Mike Fleischhauer, Greyhound's senior customer services manager. "We're not going to let them take customers away from us."

And that is why Greyhound today is reducing its one-way fare to New York to -- $7. That's $7 on 10 Washington-to-New York departures between 12:01 a.m. and 6:30 p.m. Fleischhauer said Greyhound will keep that fare "as long as it takes" to beat Peter Pan.

"That's crazy," said Dan Klink, manager of the Peter Pan Trailways terminal, who noted that $7 doesn't even cover the price of a tank of regular unleaded gasoline in an economy car.

The Peter Pan offer was supposed to end Aug. 15. It was supposed be something of a lighthearted gimmick, Klink said. But if it's war Greyhound wants, well ...

"So, they've gone to $7, huh?" Klink said. Told that was indeed the price, he said, "I think we'll have a press release tomorrow."