The leader of Peru's leftist Shining Path insurgency was captured on Sunday after being shot in a remote jungle rife with drug trafficking, giving President Ollanta Humala his first major victory against what remains of the rebel group.

Artemio, the nom de guerre of Florindo Eleuterio Flores, was flown to a hospital in Lima after his arrest by security forces. Local media showed Humala standing next to Artemio, who was laying in a bed with his hands wrapped in bandages.

Humala, who fought the Maoist group while an army officer in the 1990s, said the arrest would dismantle the Shining Path in the Huallaga Valley, which has long been a centre of the cocaine trade in Peru, the world's top coca grower.

With this, I think we can now begin to bring peace to the Huallaga, Humala said.

The last high-ranking figure of the Shining Path who was still at large, Artemio took charge of several hundred members of the group in the Huallaga Valley after the founder of Shining Path, Abimael Guzman, was imprisoned in 1992. The group survived in recent years by charging fees to guard drug trafficking routes.

Though the rebels have not posed a threat to the stability of the government for years, they were once a powerful and feared force that threatened to topple the state. Nearly 70,000 people died in a bloody internal conflict launched by the Shining Path in 1980.

We can tell the country today that the terrorists in the Huallaga Valley have been defeated, having captured Artemio alive, Humala said.

Humala initially had said Artemio, who never finished high school and swears ideological allegiance to Guzman, was dead.

Artemio, who is in his 50s and known for using multiple aliases, was hurt early on Thursday and reportedly suffered a punctured lung and a severe wound to his right hand that caused heavy bleeding.

Defence Minister Alberto Otarola said special forces attacked Artemio but gave no details about the operation. One local media outlet said Artemio had been shot by one or more members of the Shining Path who conspired with the government to turn against him.

After the shooting, some of Artemio's aides took him to a medical clinic and a nurse who was forced at gunpoint to bandage his wounds later said he was mortally wounded. His aides fled with Artemio as army helicopters chased them, but eventually they abandoned him on a riverbank.

Peruvian anti-drug police tried for years to arrest Artemio and the United States two years ago offered a multimillion dollar reward for information leading to his capture. The Shining Path has long been suspected of detonating a car bomb near the U.S. Embassy in Lima in 2002 that killed nine people.

Humala has vowed to step up efforts to catch what the government calls narco-terrorists. His predecessor, former President Alan Garcia, failed to stamp out several hundred rebels, who have yet to surrender their arms. More than 50 soldiers and police died on Garcia's watch trying to catch Shining Path fighters.

VRAE, HUALLAGA STILL CONCERNS

Security analyst Jaime Antezana has said the fall of Artemio could be a crushing final blow to the Shining Path in the Huallaga Valley, though former Interior Minister Fernando Rospigliosi said in the El Comercio newspaper Huallaga will struggle with drugs and armed groups for years.

The violence and problems in the Huallaga aren't going to end. What's going to end is a specific front occupied by Artemio, he said.

Humala's approval rating rose 7 percentage points to 54 percent in January after he shuffled his Cabinet to give it a more law-and-order bent and to crack down on protests against big mining projects.

In December, the reclusive Artemio emerged briefly from hiding to ask the government for a truce and for amnesty after years of fighting. His pleas were rejected and government officials said they would hunt him down.

Besides the Shining Path group in the Huallaga Valley, another faction of the rebels is active in a knotted bundle of river valleys in southeastern Peru known as the VRAE, which is the world's most densely planted coca-growing region.

Security analysts say the group in the VRAE, lead by Victor Quispe, has mostly abandoned its Maoist ideology and is basically a criminal enterprise engaged in the drug trade, but Quispe and his brothers have periodically said they are committed Communists. Some security experts have said the Quispe faction could try to expand into the Huallaga Valley now that Artemio's group has been weakened.

(Additional reporting by Teresa Cespedes; Editing by Doina Chiacu)