LIMA (Reuters) - Peruvian President Alan Garcia on Monday demanded Chile respond to a spy scandal that has stoked century-old tensions but stopped short of suggesting the spat would hurt bilateral trade worth more than $3 billion a year.
Peru has detained an air force officer on suspicion of treason for allegedly spying for Chile. Peru cited the incident as its reason for quitting the Asia-Pacific Economic Cooperation summit in Singapore this past weekend.
Garcia was scheduled to meet with his Chilean counterpart, President Michelle Bachelet, at the summit.
"These are repulsive acts that put Chile in a very bad light before the world," Garcia told reporters in Lima, adding that the alleged espionage had hurt Peru's national security. He demanded a detailed explanation from Chile.
Chile has rejected the spying accusations and accused Garcia of over-reacting. Chilean officials suggested he timed the espionage revelation to create a scandal at the summit where leaders were holding talks on regional integration.
"Chile's government does not practice espionage. We don't accept allegations about this from any quarter," Chilean Foreign Minister Mariano Fernandez told reporters in the Chilean capital, Santiago, on Monday.
"Chile has nothing to do with this case," he added. "We call on Peru's authorities to investigate this matter thoroughly, and to keep calm," he added, saying Chile's ambassador to Peru would remain in Santiago for a few days for consultations.
Peru and Chile have frequently sparred over their border since Chile won the 1879-1883 War of the Pacific and took a slice of mineral-rich land from its neighbor.
Last year, Peru filed suit against Chile at the International Court of Justice in The Hague, disputing its maritime territorial rights and demanding more control of the rich Pacific Ocean fishing waters between them.
Peru and Chile, however, are unlikely to break their strong economic ties over the issue. The two countries forged a trade pact earlier this year as a way to help offset the global economic slowdown.
Reporting by Dana Ford and Teresa Cespedes; Editing by Terry Wade and Simon Gardner