Caral, Peru On a scarp overlooking a lush valley carved through Peru's dusty Andean foothills, archeologists have unearthed what they believe is the oldest city in the Americas -- the sacred ruins of Caral.

A team from Peru's San Marcos University has painstakingly excavated the arid hillocks above the River Supe north of Lima to reveal six ancient pyramids, an amphitheater and residential complex that they have dated to as early as 2627 BC.

``In these structures of stone, mud and tree trunks we find the cradle of American civilization,'' said Ruth Shady, who is leading the excavations.

The discovery is already being hailed as the most exciting find in Peru since 1911, when Yale archeologist Hiram Bingham stumbled on the ruined Inca citadel of Machu Picchu hidden in the clouds of the craggy Andean highlands.

Anthropologists working at Caral believe the windswept ruins 14 miles from the Pacific will provide a glimpse of the birth of urban society in the Americas and may challenge theories that the earliest civilizations settled by the sea.

They say a priestly society built the stone structures here without the aid of wheels or metal tools almost a century before the Egyptians erected the Great Pyramid at Giza.

The remains, some 120 miles north of Lima in a coastal desert between the Andes and the Pacific, predate Machu Picchu by three millennia and are some 1,100 years older than Olmec in Mexico, the oldest city in the Americas outside Peru.

``I hope this will help Peruvians understand their history,'' said dust-caked archeologist Rodolfo Peralta, 31, standing atop the biggest pyramid, which is some 60 feet high and a staggering 500 feet long.

``Otherwise people will think our history is just a tale of being conquered by the Spanish,'' he said. RIDDLE OF ABANDONMENT

Up to 10,000 people may once have inhabited the 160-acre site at Caral, archeologists believe, and its construction suggests a regional capital with urban planning, centralized decision making and a structured labor force.

Now Andean Indians -- including women with braids, black hats and traditional colored skirts -- carve out a livelihood tending goats and growing corn beside the dirt track that connects Caral to the nearest town an hour's drive away.

Despite the hardships of working in the blazing sun and living in an isolated farmhouse with no electricity or running water, the sunburned, bearded Peralta brims with enthusiasm. For a nation subjugated by 16th century Spanish conquistadors, who ransacked its rich indigenous culture in a frenzied lust for gold, such discoveries testify to the long heritage of what Europeans dubbed the ``New World.''

The once-in-a-lifetime find has sparked acrimony in the international academic community. Shady accuses U.S. anthropologist Jonathan Haas of Chicago's Field Museum of trying to steal the credit for seven years of her hard work.

``The problem is that he has now presented Caral as his discovery, when my team has been investigating here since 1994, sleeping on the ground and working tirelessly to uncover it,'' an irate Shady said in her cluttered Lima office.

Haas helped Shady carbon date reed matting from Caral last year after he became interested in the site in 1996. The two co-wrote a paper in the April edition of Science magazine.

``I think there has been a misunderstanding. ... I never wanted to take any credit from Ruth for her discovery,'' Haas told Reuters by telephone from Chicago, adding U.S. media had played up his role.

One of the many riddles now confronting archeologists at Caral is why the inhabitants abandoned the settlement. Like all pre-conquest civilizations in Peru, the people here left no written records and the settlement at Caral was too early even to have ceramics or more than the most basic tools.

``One theory is that a drought produced a famine, which forced the city dwellers to move on,'' said Peralta, noting residents painted many buildings black in the final stage of habitation, after originally coloring them white for purity.

Subsequent civilizations never occupied the site but apparently revered it, leaving gold and silver offerings at its perimeters. South America's most advanced pre-conquest civilization, the Incas, built temples on its outskirts.

Inhabitants of Caral also apparently believed the buildings were divine, dotting their homes and temples with tiny alcoves filled with dried-mud figurines and small sacred bonfires.

Excavations have also exhumed a skeleton from the walls of one home, which was buried there rather than sacrificed. BURYING THE DEAD As with the Mayans who ruled Mexico, Guatemala and Honduras around AD 300, the construction of religious pyramids suggest the existence of a theocracy, but the inhabitants of Caral differed by living in their ceremonial centers, Peralta said.

Rooms and courtyards on top of the terraced mounds suggests they had both religious and administrative purposes. Varied housing also suggest a stratified society, with different residential areas for the priestly and laboring classes.

There are also signs Caral had the earliest known system of crop irrigation in the Americas. Coastal artifacts, including 32 pipes made of pelican bones and copious anchovy and sardine bones, suggest the residents may have traded their cotton and fruit crops with fishing communities in return for food.

Researchers expect to learn much more about the daily lives of the people when they discover the city's cemetery. ``You can tell a lot from a culture from the way they bury their dead,'' Peralta said as the sun set behind a pyramid over corn fields in the valley below

. Peru has by far the most archeological sites in South America. Eight more unexplored prehistoric settlements in the once-fertile Supe basin make it of unique importance.

Researchers discovered these ruins some 100 years ago, and Peralta criticized the impoverished Andean nation's government, which has put culture ``bottom of the list'' for spending. With a team of only four laborers from a local village, progress is slow, but Peralta believes the picturesque ruins at Caral could vie with Machu Picchu for tourist attention. ``It would be good for the world to hear something about Peru other than political scandals,'' he said, referring to a decade of corruption under ex-President Alberto Fujimori. ``But let's not bring the devil into paradise.''