Six people have been killed and about 50 injured in a blast at a market in the city of Juliaca in southern Peru.
A backpack containing dynamite exploded at the market, which was crowded with people marking its 40-year anniversary.
Police said that they were trying to determine whether the blast was an attack or an accident.
One official put it down to fireworks intended for the celebrations but another said terrorism could not be ruled out.
"What the police have to determine is the motive, the aim and what kind of criminal did it," Police Col Romeo Delgado told the Associated Press news agency.
The Andean city of Juliaca is about 830km (520 miles) south of the capital, Lima. The blast happened at about 2200 local time on Friday (0300 GMT Saturday).
This week marks 27 years since Peru's Maoist rebel group Shining Path carried out its first armed attack, beginning a wave of violence that lasted through the 1980s and early 1990s.
But in recent years the group's influence has been greatly reduced. Its leader, Abimael Guzman, was captured in 1992 and is currently serving a life sentence in prison.