One night last month, 14-year-old Alfredo Aguilar was dragged from his family's small cafe here by local police and shot in the head on the sidewalk outside. He died in a hospital the following day.

The police of this provincial capital, built high in the old Andean territory of the Incas, are calling the death another incident of their two-year-old battle with Peru's burgeoning guerrilla movement, the Sendero Luminoso. The boy was a guerrilla recruit, police say, who stole out on the town's streets after curfew to attack patrolling guards.

But there is another version circulating through the town, and that account, by family members and a witness, says that Alfredo Aguilar was only vaguely aware of the strange, Maoist guerrillas who from their base here have terrorized Peru and its fragile democratic government.

Aguilar, his family said, was killed after he refused to open the bolted door of the cafe to two drunken members of the Civil Guard who demanded that he supply them with beer.

No one now expects anything to be done about the incident, and that, say long-time residents here, is the tragedy of what is happening in Peru's impoverished Andean provinces. Violence has become banal.

"These little things happen, these small accidents or oversights," said Augusto Vega Rioja, the town's prefect and chief civilian authority. "Anybody, even the innocent, can get hit by a stray bullet."

After centuries of neglect and underdevelopment, this long stretch of mountain plateau has given birth to a familiar cycle of terrorism and repression. As an indigenous rural movement, the insurgency is remarkable only because it is new to Peru, a relatively poor country of 18 million dominated since Spanish colonial times by the white, aristocratic minority centered in the sprawling capital of Lima on the Pacific Coast.

Although the estimated 500 to 1,000 guerrillas who make up the Sendero Luminoso, or "shining path," are far from their goal of overthrowing Peru's government for a communist one, they are considered a threat to the political stability of President Fernando Belaunde Terry by both government supporters and foreign diplomats.

Government and police authorities worry that they lack the means to uproot the guerrillas from the southern Andean region or even from Lima, where a state of emergency was declared in August after the group blacked out the city and set off a coordinated series of bombs.

At the same time, the escalating violence all around Ayacucho, 350 miles southeast of Lima, is threatening to provoke the kind of political vulnerability and civil disorder that have prompted a history of military coups in Peru. Officials say that the guerrillas have been responsible for at least 74 deaths this year.

In an interview in Lima, Belaunde said he thought the guerrillas posed "essentially a police question. Now whether the police are successful or not is a matter of opinion or discussion. It may take some time.

It's very difficult to fight a ghost," he added. "It is more difficult for me to be frightened by a ghost."

It is the spectral presence of the Sendero Luminoso that has touched off much of the fear and tension among the 70,000 residents of Ayacucho, a 450-year-old town trimmed with 32 churches, narrow, cobblestoned streets and white-plaster, red-tile colonial architecture.

Little is known here about the Sendero Luminoso, and many of its members are believed by police and residents alike to blend invisibly into the town's population. The group has no known camps or bases in the countryside, but its members appear frequently and unpredictably in and around the town to stop buses, set off bombs, assassinate suspected informers and even take over schools for a dose of their eclectic blend of Maoist ideology and mysticism.

"The Sendero are everywhere here -- they are all around you," said one skittish teacher at Ayacucho's University of San Cristobal de Huamanga, where the group was formed in the early 1960s as a splinter from a local faction of the Peruvian Communist Party. "People are very frightened to talk even with their friends, because they never know if they are with a guerrilla."

But the Sendero Luminoso's invisible hold is only part of the terror in Ayacucho, a variety of residents and local leaders said. Much more visible are the approximately 1,000 members of three separate police forces assigned to the area.

Supplied by the Peruvian Army with tanks and communications equipment, the troops crowd the town with incessant patrols and lounge in the central square with automatic weapons slung carelessly across their laps. Local leaders charge that the soldiers have committed abuses ranging from harassment to robbery, rape and unjustified killings.

"Torture by the police is institutionalized here," said Jaime Urrutia, the local head of a human rights committee. "The police work through informers, and they have no solid information on which are the Sendero. They are indiscriminate, and everyone is scared of them."

In many ways, Urrutia and other local leaders said, the threat of the guerrillas has come to be overshadowed here by a classic confrontation between young, ill-trained security forces and local residents with a tradition of suspicion and distaste for outside authorities that dates to their rebellions against Inca rule in the 15th century.

"The police forces have committed a number of errors, and they are people from other places. They are looked upon as strangers by the townspeople," said Luis Millones, a professor at the university. "They don't speak Quechua the local Indian language , they don't look like people here. In contrast, the Sendero Luminoso movement speaks their language, its members are from the area, and they promise a better life."

While local police officials deny the many reports of abuses, government officials concede that the guerrillas have steadily gained new recruits and strength in the little more than two years since they began operations. Meanwhile, the police presence in Ayacucho and the province around it has grown heavier, and gunfire rattles through the quiet town now every night after the 9 p.m. curfew.

Belaunde has promised to attack the endemic poverty and underdevelopment in the area, and government officials announced a $250 million public works program addition six months ago that in Lima was dubbed "the Marshall Plan for the Andes."

But none of the money has yet arrived in Ayacucho, officials say. Meanwhile, the province of about 600,000 residents continues to have the lowest level of production and the highest level of unemployment in Peru, according to official statistics. Seventy percent of the people live by farming the poor, rugged soil; nearly half are illiterate, and the average yearly income is about $400.

"Ayacucho is not a place to stay," said Enrique Moya Bendezu, the rector of the Huamanga University and a former colleague of the young professors who several years ago decided to begin practicing the revolution they had long talked about. "The soil is poor, people abandon the land, and there has been no presence of the government or of civic activity."

It is those factors that are most rapidly swelling the guerrillas and the violence, Moya said.

"The government has to offer an alternative to the guerrillas that would be similar to what they have put forward," he said. "Similar in the sense that the government shows that it is also capable of offering some social justice."