BY TYLER BRIDGES

 LIMA, Peru -- On a festive night a couple of weeks ago, 500 people at Lima's
 National Art Museum celebrated the fall of President Alberto Fujimori and his
 hated intelligence chief, Vladimiro Montesinos.

 With pisco sours, they toasted those honored by a Peruvian human rights group
 who had opposed Fujimori and Montesinos, and they roared their approval at
 comments directed against the two men.

 ``Nobody is above the law,'' exulted Carlos Escobar, a state prosecutor exiled for
 nearly 10 years because he investigated army human rights abuses. His cry was
 hailed with ringing cheers.

 After 15 years of political and economic upheaval, Peru is finally beginning to
 exhale. But recent Peruvian history offers no guarantees that this startling
 success will produce a new Peru, free of the excesses and failures of the past.

 ``All of us have done a lot to get to this moment,'' said Baruch Ivcher, a television
 magnate who became a symbol of resistance to Fujimori's strong-arm tactics
 when he was forced into exile four years ago after his station broadcast a news
 report linking Fujimori and Montesinos to drug trafficking.

 Ivcher made his remarks to a crowd assembled at his home as he hosted another
 party to hail the demise of the Fujimori regime.

 NEW COALITION

 At the moment, a new coalition government is steering the country with a calm
 hand, and new elections are scheduled for April amid a widely held optimism that
 Peru's next president should be positioned to chart a stable course. But lurking
 beneath the optimism is an acknowledgement that re-establishing a stable
 democracy will not be easy because the traditions of stability and political liberty
 have been almost destroyed.

 First there was Alán García, elected president in 1985 and so charismatic that his
 favorable rating reached an astonishing 94 percent two years later.

 But García proved unable to deal with Peru's underlying political and economic
 problems. He left office in disgrace in 1990, with two guerrilla groups, the Shining
 Path and Tupác Amaru, on the rampage and inflation having skyrocketed to an
 annual 7,000 percent.

 Disgusted with García and traditional parties, the Peruvian electorate turned to
 Fujimori, an unknown college professor who upset the political establishment by
 defeating Peru's most prominent writer, Mario Vargas Llosa, to succeed to the
 presidency.

 Over the next 10 years, Fujimori managed to tame hyperinflation and defeat the
 insurgent movements but he ran roughshod over political opponents of all stripes,
 alienating many of his political followers.

 In May, Fujimori won a controversial third term over the objections of Alejandro
 Toledo, his leading opponent, and the international community. They complained
 that the Peruvian president had rigged the electoral system to ensure his victory.

 In September, Fujimori's behind-the-scenes right-hand man, Montesinos, fled the
 country after a leaked videotape broadcast on television showed Montesinos
 paying an opposition congressman $15,000 to support Fujimori. Two months
 later, it was Fujimori's turn to pull a stunning disappearing act, announcing while
 visiting Tokyo that he was stepping down as president and would remain in Japan
 indefinitely.

 Valentín Paniagua, who had been the president of Congress, replaced Fujimori,
 and promptly filled his Cabinet with the ex-president's opponents, men and
 women who had spent years on the outside peering in.

 U.S. ENVOY

 John Hamilton, the American ambassador, who had pointedly told Fujimori earlier
 in the year that the United States wanted fair elections, captured the country's
 mood when he said in an interview at Baruch's home, ``There's a kind of euphoria
 in the air now.''

 He added a caveat: ``But I just hope it doesn't raise expectations that a future
 government can't meet.''

 The essential problem is economic. Despite gains during Fujimori's initial eight
 years in office, half of Peru's 27 million residents live in poverty, defined as earning
 less than $1.25 per day. The gap between rich and poor poses a huge political
 obstacle for any would-be political leader who wants to improve the lives of
 ordinary Peruvians.

 Many of the poor are investing their hopes in Toledo, who grew up in the port town
 of Chimbote, in an adobe home without electricity or running water. He was one of
 16 children, seven of whom died during infancy.

 As a youngster, he sold lottery tickets, shined shoes and peddled sweetened
 crushed ice drinks.

 He won a scholarship to study in the United States and ended up getting a
 doctorate from Stanford University and later working at the World Bank. Toledo
 would have been the first ``cholo'' -- as Peruvians of obvious mixed blood are
 known -- to be elected president who had not previously taken office through a
 military coup.

 A poll released recently by Apoyo, a local survey firm, showed that Toledo holds
 an early lead in the April presidential race with 25 percent. Of the other 14
 potential candidates, none had more than 9 percent.

 Most political observers expect Toledo and someone else -- potentially any one of
 the 13 registered opponents, given the volatility here -- to win a spot in a runoff
 election, to be held in May. In the meantime, a more subdued campaign is
 expected in the coming months than Peru has seen in recent elections. As one of
 Toledo's political strategists advised him last week: ``The people here are
 exhausted from politics.''