At least 240 people were killed, 160 other injured and 20 missing in a blaze sparked off by fireworks that swept through a busy shopping area in central Lima, according to a revised official toll released yesterday.
Prosecutor Maria del Pilar Peralta said the toll from Saturday's blaze could rise, as rescue workers did not yet have access to all of the affected shops due to the risk of buildings collapsing.
"This work is being done very carefully by police and a brigade of civil defence workers so as to not trigger collapses and new accidents," she said.
Civil defence official Mr Jose Luis Bazan said the difficult removal of bodies was proceeding slowly, due to the fact that some of the charred remains were trapped in burned-out cars.
Most of the victims were burnt to death or died from smoke inhalation, according to officials who said that the tragedy was one of the deadliest ever to strike Peru's capital city.
The city's morgue was full to capacity, so authorities set up a makeshift morgue in an auditorium at the medical school in Lima's Mayor de San Marcos national university.
Hospital wards across the city early yesterday were filled with others suffering from burns and smoke inhalation.
In an official statement late on Saturday, the President of Peru, Mr Alejandro Toledo, declared two days of national mourning for the blaze victims starting yesterday and sent his condolences to their families.
Early yesterday, Mr Toledo cancelled a flight to the interior of the country to visit the fire area, describing it as "a terrible disaster".
He later announced that the government would use state funds to cover the "personal losses" of those killed in the fire.
"From this moment on, my government assumes total responsibility for covering the costs of the personal losses of all those killed," Mr Toledo said.
He also imposed a ban on production and imports of all fireworks materials, and said the police would conduct a thorough investigation to determine the cause of the blaze.
According to witnesses, the fire broke out around 7.30 p.m. in a store that was illegally selling home-made fireworks after vendors tested some of the wares.
Paramedics and police converged on the site in an attempt to rescue survivors who fled to building roofs, and clambered up buildings up to eight stories high.
Firefighters were hampered by difficulty getting water from the street pumps, a lack of electricity and a wall of thick black smoke that blanketed the area, as well as crowds of onlookers who blocked the narrow streets.
The affected four-block area of central Lima was packed with fireworks vendors and customers buying fireworks for year-end celebrations.
A live television broadcast showed scorched bodies, including teenagers and children, piled on top of each other.
After several hours, firefighters managed to control the blaze, which consumed more than a city block of old homes and tall buildings, as well as scores of vehicles. Many walls crumbled from the heat.