The Peruvian President, Alan Garcia, has ordered the use of warplanes to destroy clandestine airstrips and drug laboratories in the Amazon jungle.
Mr Garcia said drug barons must also be pursued and warned that Peru could face an insurgency funded by illicit drugs.
Peru must kill the drug-trafficking trade or have to deal with an insurgency like that of neighbouring Colombia, Mr Garcia said.
Peru is the second-largest producer of cocaine in the world after Colombia.
In a characteristically dramatic speech, Mr Garcia said Peru must do away with every last jungle drug factory and secret airstrip by either bombing or machine-gunning them.
Mr Garcia was speaking at the end of a two-week suspension of efforts to eradicate coca plants in one Amazon region, in his strongest statement on the cocaine trade since taking office last year.
The eradication campaign there was suspended after the agriculture minister, Juan Jose Salazar, negotiated with striking coca farmers. He was later heavily criticised by the opposition and some drug-trafficking experts.
Mr Salazar said the eradication strategy of the last 10 years had failed and there had been an increase in violence and cocaine production.
It is clear that President Garcia wants to draw a line between himself and the actions of his minister, and his critics accuse him of talking tough in an effort to impress the US.
Its policy clearly favours eradication and persuading farmers to grow other less-profitable crops such as coffee and cocoa.
Later this month, Mr Garcia will visit Washington to try to ratify a free trade agreement with the US, which had been thrown into doubt by the Democrat-led Congress.
Peru allows a certain amount of coca leaf to be legally cultivated for traditional and medicinal use, but this makes up less than 10% of the 100,000 tonnes of the leaf produced in the country.
Recent years have seen a rise in Peru's cocaine production and the growing presence of drug-trafficking cartels.