In this story:

• Peru responds by proposing new border zone
• Ecuador denies report

LIMA, Peru (CNN) -- Tension over the disputed border between Peru and Ecuador increased on Thursday when Peru's Foreign Minister Eduardo Ferrero charged that Ecuadorean troops had infiltrated a remote stretch of Peruvian territory near the border.

News of the alleged incursion, which Ferrero called a "provocation," caused President Alberto Fujimori to cancel a planned trip to Colombia on Thursday to attend the inauguration of President-elect Andres Pastrana.

"The president has canceled his trip, because he has decided it is necessary to stay in the country until the situation is clarified," Ferrero told a news conference.

Fujimori also cancelled a scheduled trip to Ecuador to attend the inauguration of President-elect Jamil Mahuad because of the alleged incursion.

Ferrero would only say that the incursion took place "in the last few weeks," when the Ecuadorean troops reached 12 miles inside Peruvian territory in the disputed Cordillera del Condor region, 560 miles north of Lima.

But his charge came as the two countries appeared set to negotiate an end to a long-running dispute over 49 miles of unmarked border that had erupted in wars in 1941, 1981 and 1995.

Fujimori had said that the negotiations, which began after the 1995 conflict, were "practically concluded."

Sources close to Peru's senior military said Ferrero's statements were part of a strategy of pressuring Ecuador to sign the accord the two neighbors have been hammering out for years with the help of the United States, Brazil, Argentina and Chile.

Peru said it had responded to Ecuador's intrusion by calling on the peace guarantor nations to create and police a new, temporary demilitarized zone extending 30 miles into Peru.

"We are talking of a zone of control and vigilance that would result in the separation of troops that are very close and that, if they remain in such a situation, could provoke an incident at any moment," Ferrero told a news conference.

Ecuador immediately denied there had been a troop incursion, saying all was "totally normal" on the frontier and reiterating its determination to conclude a long-awaited peace accord that both sides have said is possible within weeks.

Ecuador's military representative on an international mission monitoring the disputed region, Gen. Carlos Calle, said Peru's charge was "completely false."

Ecuador's Foreign Minister Jose Ayala responded to Ferrero's charges saying, "in no way could Ecuador provoke, nor is going to react to provocation. We are in a process of peace and we want that the process is concluded as soon as possible in a satisfying way for both countries."

The Andean neighbors regularly swap charges that the others' troops had infiltrated their territory.

Tensions started growing on July 28 when two Peruvian soldiers were injured when they stepped on land mines in the disputed area amid a largely uninhabited wilderness.

Peru accused Ecuador of planting the mines and Ecuador accused Peru of carrying out a troop build-up in the region.

In Washington, the State Department said it had no confirmation that an Ecuadorean incursion had taken place and declined to comment on Peru's charges.

"We and the other guarantor nations are aware of the reports and are following the situation closely," a State Department spokesman told Reuters.

Last week President Bill Clinton pressed Mahuad to settle the dispute, telling him on a visit to Washington a deal was finally within reach.