Peru has deployed 1,500 troops to cordon off a remote area where the Shining Path rebel group allegedly took the hostages, the defense ministry said.
"The government does not negotiate with terrorists, the government acts within the law," Justice Minister Juan Jimenez told local television about Monday's kidnapping in the Cuzco region of southeastern Peru.
The Swedish company Skanska and Peruvian firm Construcciones Modulares issued a statement calling for the "speedy and safe release of its 36 employees."
The ministry said in a statement late Wednesday it was sending hundreds of troops in to "isolate the narcoterrorists," referring to the Shining Path, a guerrilla movement that was largely dismantled more than a decade ago.
"Setting up a security zone is necessary in order to rescue these people
alive," said Jimenez.
The rebels entered the town of Kepashiato in Cuzco, about 500 kilometers southeast of Lima on Monday, and kidnapped the workers.
The leftist Shining Path was largely dismantled when its leaders were captured in the mid-1990s, but not before a conflict that left some 70,000 people dead, according to Peru's Truth and Reconciliation Commission.
However, remnants of the guerrilla group still operate in remote regions of