President Bush arrived in Monterrey, Mexico, late Thursday on a brief tour of Latin America — undeterred by "two-bit terrorists" who set off a bomb outside the U.S. Embassy in Peru.

Monterrey is Bush's first stop for a U.N. summit on global poverty. The president met privately Thursday evening with Mexican President Vicente Fox and Canadian Prime Minister Jean Chretien. The three leaders, laughing, shared a three-way handshake before sitting down to business.

Afterward, White House spokesman Ari Fleischer said the three leaders discussed energy, particularly natural gas pipelines in Canada, and the U.S.-Canadian dispute about Canada's softwood lumber exports. They also spoke of their desire for a free trade pact for the Western Hemisphere, to build on the success of the North American Free Trade Agreement, Fleischer said.

The president got a sendoff for a four-day trip to Mexico, Peru and El Salvador with a raucous airport rally in the Texas border town of El Paso.

"Sometimes it seems like the terror threat might be going away, but all you got to do is look on your TV today and be reminded about how evil these murderers are," Bush told supporters gathered there.

"We cannot let the terrorists take over freedom-loving societies and we will not," Bush said, decrying a suicide bombing in the Middle East, a grenade attack on a church service in Pakistan and the car bombing near the U.S. Embassy in Lima, Peru.

The subject of terrorism loomed large over Bush's day. Before boarding Air Force One for El Paso, Bush met with Milton Green, whose wife and stepdaughter were killed in the Pakistan attack. And while en route, he called Italian Prime Minister Silvio Berlusconi to discuss an attack by an offshoot of the Red Brigades terror group, in which an Italian economist was killed.

The president told reporters in Washington that Wednesday's attack in Lima, which killed nine people, would not make him change his travel plans. He is to visit Peru on Saturday, the first U.S. president to do so. He said he trusts that President Alejandro Toledo will make his country safe for his American visitor.

"Two-bit terrorists aren't going to prevent me from doing what we need to do, and that is to promote our friendship in the hemisphere," Bush said. "Our neighborhood is important to us, Peru is an important country. President Toledo has been a reformist, obviously worked within the democratic system. And you bet I'm going."

Bush said "we might have an idea" who set off the bomb. "They've been around before," he said. While Bush did not identify the suspected group, he nodded when a reporter asked whether the terrorist group Shining Path was making a resurgence.

Other U.S. officials said Shining Path was suspected.

Bush told the El Paso crowd that the recent attacks underscore a need for greater security within the United States. He said he was asking Congress for an extra $5 billion for bolstering security at U.S. airports and borders. The funds were part of his request for $27 billion in emergency spending submitted Thursday.

"This is a dangerous world," Bush said. "Too many people are losing their lives to murderers."

Bush visited a border crossing point at Cordova Bridge to see U.S. inspection operations along the 1,951-mile border. Wearing a U.S. Customs cap, he poked around cargo trucks and examined a motorcoach recently seized by agents after high-tech density meters and X-rays detected secret compartments containing drugs.

The bus, seized two weeks ago, had 1,500 pounds of cocaine and 2,500 pounds of marijuana stashed in a false compartment. Bush heartily shook the hand of the Customs agent whose contraband-sniffing dog first smelled something amiss.

Bush announced that his administration had reached a 22-point border agreement with Mexico much like the one Homeland Security Director Tom Ridge signed with Canada in December.

Listing goals, planned technology studies and information-sharing commitments, the U.S.-Mexico agreement to be signed in Monterrey on Friday is designed to tighten border security after the Sept. 11 terror attacks while also preventing traffic jams and trade problems.

The agreement calls for a joint survey of infrastructure to identify potential bottlenecks and weaknesses that put security at risk, to develop high-tech systems to speed the flow of travelers, to create a joint U.S.-Mexico "advanced passenger information exchange system" to weed out smugglers and to develop faster means of exchanging customs data.

The Associated Press contributed to this report.