PUTUMAYO, Colombia, May 22 - Navy speedboats bristling with machine guns skimmed along a muddy river at the heart of Colombia's main drug-producing region, spraying volleys of bullets the size of Coke cans into the bank.

"It was like judgment day. They shot down all those trees and the children were crying," a peasant in his shack alongside the Putumayo River on Colombia's southern frontier with Ecuador told Reuters just minutes after the raid.

"They treat us all as guerrillas," he added as his wife watched for fresh signs of the marauding "Piranhas," named after the flesh-eating Amazonian fish, with .50-calibre guns.

Far from just the comments of a gun-shy peasant, the man was voicing a widespread fear in jungle-covered Putumayo province that Doomsday is fast approaching.

Putumayo and neighbouring Caqueta province, long-standing Communist guerrilla strongholds, have long been racked by the political violence of Colombia's three-decade-old civil conflict that has cost 35,000 lives in just the last 10 years.

But the region is now also ground zero for the Colombian government's U.S.-backed offensive against the rebels and the cocaine trade called "Plan Colombia." Local officials say the plan will draw peasants into an all-out war involving the military and outlaw gunmen on the left and right.

"The civilian population is ever more frightened and more divided. This is the law of the jungle: It's everybody against everybody," said German Martinez, municipal human rights ombudsman in the Putumayo river port of Puerto Asis.

Mayor Manuel Alzate went further, predicting a "heavy government hand" would force peasants into rebel ranks.

Epicentre of Cocaine Trade

With some 300 square miles (770 sq km) of coca leaf plantations, Putumayo and Caqueta are the epicentre of Colombia's cocaine industry, which produces a total of some 520 tonnes per year, 80 percent of world supply.

Alleging that the FARC reaps up to $500 million annually from its ties to narco-traffickers, Washington has offered $1.6 billion in mostly military aid to help smash the alliance. The package is bogged down in Congress, but U.S. officials say it could be passed by late June.

Peasant leaders estimate more than 100,000 civilians who eke out a living tending illegal drug crops will be forced to flee their homes in the two provinces as a result of what U.S. officials dub "the campaign into the south."

By Washington's calculation, only 10,000 roving farmhands would be displaced.

The Revolutionary Armed Forces of Colombia (FARC), Latin America's largest surviving rebel force, has urged the peasants to arm and defend themselves with "shotguns and machetes." The guerrillas are even rumoured to have tried to press-gang civilians into rebel ranks, apparently with limited success.

"The FARC have tried to arm the population, but the people have said they don't want to. ... From the moment a peasant picks up a gun they're becoming one of the armed actors," said Eder Sanchez, regional head of national peasant group ANUC.

Fabian Ramirez, No. 2 in the FARC's Southern Bloc fighting division, denied handing out automatic weapons to civilians.

Rival ultra-right paramilitary fighters, meanwhile, warn they will not allow the FARC to "monopolize peasants." Since arriving in the region in early 1998, they have assassinated scores of suspected leftist sympathisers.

"Revolutionary War Is Necessary

At a camp just outside Puerto Asis, a paramilitary chieftain known by the alias Commander Yair told Reuters in an interview that his men, members of the United Self-Defence Forces of Colombia (AUC), backed Plan Colombia.

He said the AUC may even spearhead the U.S.-backed offensive, flushing out rebel strongholds and then ceding the territory to the Colombian army, which appears to have little stomach for a ground war with the guerrillas.

As a former sergeant in Colombia's special forces, he was trained by elite U.S. Ranger and Navy SEAL units. Now he and his fighters transit freely in and out of Puerto Asis under the nose of the army's 24th brigade and a heavy police detachment.

Much of Plan Colombia hinges on the use of a U.S.-trained airborne Colombian army anti-drug unit to destroy clandestine cocaine laboratories and help dump powerful herbicides from the air on sprawling drug plantations.

Similar forcible eradication efforts in 1996 sparked violent peasant marches in Caqueta, Putumayo and Guaviare provinces that lasted for months and led to the death of a handful of protesters in clashes with security forces.

The government later reneged on a deal to help peasants switch to legal crops and improve local infrastructure. Since then government forces and paramilitary gangs have killed many of the march organisers, but at least three top leaders from Putumayo, fleeing almost certain death, joined the guerrillas.

"When you ask peacefully and come up against repression you must defend yourself. ... Armed struggle is a necessity in our country," a Putumayo peasant leader turned rebel, known by the alias Juan Pablo, told Reuters in a secret jungle camp.

"Through the revolutionary armed struggle you must fight for the rights of all citizens," he added.

Peasant Calls Meet Deaf Ears

Putumayo's peasants are still opposed to forced fumigation of their coca crops, the only product that ensures them a cash income because of difficulties in getting other legal and less valuable crops from remote small-holdings to market.

But at least publicly they have ruled out new marches or mass backing for the rebels. Instead, they are calling for a "third way" -- government help to set up a pilot crop substitution programme in 30 hamlets.

So far the demands have fallen on deaf ears or been muted by fear of the 800-strong AUC unit in Putumayo. Unwittingly, the peasants have partly funded their AUC enemies here by selling semi-processed cocaine paste in paramilitary-held regions where narcotraffickers pay at least $150 more than the $1,000 per kilo that dealers offer in rebel zones.

In both areas, traffickers and sometimes the peasants themselves must pay a "war tax" to the controlling gang.

For its part, Washington has ruled out any aid for social development projects in rebel "Red Zones." But without viable alternatives after forced fumigation, peasants are likely to try to restore the uneasy status quo in the coca fields.

"Putumayo is the last corner of Colombia and forgotten by the government," said Jose Gaviria, a civic leader in Chufiya, a village 1-1/2 hours down the Putumayo River from Puerto Asis. "If the government sprays and there's nothing more profitable to grow then we will plant coca again."

Beside him lay several thousand potted coca seedlings -- enough to replant 7.5 acres (3 hectares).

© 1999 Reuters Limited.

Thanks to Paul Wolf for sending this article along.