The military operation to crush the insurgency was authorized by the President of the lower house, Ítalo Argentino Luder, who had the authority on the executive power during the absence of the President María Estela Martínez de Perón, in virtue of the Ley de Acefalía (Acephale Law, or Headless Law). Better known as Isabel Perón, the head of the state was then sick. Ítalo Luder issued the secret presidential decree 261/1975 which stated, against the letter of the Constitution, that the "general command of the Army will proceed to all of the necessary military operations to the effect of neutralizing or annihilating the actions of the subversive elements acting in the Tucumán Province."
The Argentine military used the territory of the smallest Argentine province to implement, in the frame of the national security doctrine, the methods of the "counter-revolutionary warfare" taught first by the French military, then by The Pentagon. These included the use of terrorism, kidnappings, "forced disappearances" and concentration camps where thousands of guerrilleros were tortured and assassinated. The logistical and operational superiority of the military, headed first by General Acdel Vilas, and starting in December 1975 by Antonio Domingo Bussi, succeeded in crushing in a few months the insurgency and dissolving the links between the ERP, lead by Roberto Santucho, and the local population.
General Acdel Vilas deployed over 4,000 soldiers, including two companies of elite commandos, backed by jets, dogs, helicopters and a Beechcraft Queen Air B-80 equipped with IR surveillance assets. The ERP enjoyed considerable support from the local people and its members moved at will among the mountain villages around Famaillá and the Monteros mountains, until the Fifth Brigade came on the scene. The guerrillas who had laid low when the mountain brigade first arrived, soon began to strike at the commando units. It was during the second week in February that a platoon from the commando companies was ambushed at Rio Pueblo Viejo and took some losses including its platoon commander. Three months of constant patrolling or on 'cordons and search' operations, with helicopter-borne troops soon reduced ERP's effectiveness in the Famaillá area, and so in June, elements of the Fifth Brigade moved to the frontiers of Tucuman to guard against ERP and Montoneros guerrillas crossing into the province from Catamarca, and Santiago del Estero.
In May 1975, ERP representative Amilcar Santucho, brother of Roberto, was captured along with Jorge Fuentes Alarcon, a member of the Chilean MIR, trying to cross into Paraguay to promote the Revolutionary Coordinating Junta (JCR, Junta Coordinadora Revolucionaria) unity effort with the MIR, the Uruguayans Tupamaros and the Bolivian National Liberation Army. During his interrogation, he provided information that helped the Argentine security agencies to destroy the ERP. A June 6, 1975 letter from the United States Justice Department shows that Robert Scherrer, a FBI official, passed on information revealed by the two men to the Chilean DINA. Latin American regimes had then started, since at least 1973, a cooperation between intelligence agencies known as Operation Condor, which third phase included assassinations of political opponents in Latin America and abroad. Fuentes was then "released" and sent to Chile, where he was last seen in the torture center of Villa Grimaldi before became a desaparecido.
Nevertheless the military was not to have everything its own way. Later in August 1975 a culvert bomb was planted at the Tucuman air base airstrip by Montoneros, as a support action to their comrades the ERP. The blast destroyed an Air Force C-130 carrying 116 anti-guerrilla Gendarmerie commandos heading for home leave, killing five and wounding forty, one of whom subsequently died.
By July 1975, the commandos were mounting search-and-destroy missions in the mountains. Army forces discovered Santucho's hideout in August, then raided the ERP urban headquarters in September.
Most of the Compania del Monte's general staff was killed in October and the guerrilla unit was in disarray by the end of the year. While the leadership of the movement was mostly eradicated, many of the ERP militants and sympathizers were taken into custody as political prisoners.
Efforts to restrain the rural guerrilla activity to Tucuman, however, remained unsuccessful despite the employ of troop-transport helicopters. In early October the 5th Brigade suffered a major blow once again at the hands of Montoneros, when dozens of guerrillas assaulted the 29th Infantry Regiment during the weekend's resting of its personnel in their barracks at Formosa province. The local airport and other facilities were also briefly seized. The majority of militants had been airlifted by a hijacked airliner which had departed from Buenos Aires to Corrientes. Once the operation was over, they made good their escape towards a remote area in Santa Fe province. The aircraft, a Boeing 737, eventually landed on a crop field not far from the city of Rafaela. In the aftermath, 12 soldiers and 2 policemen were killed.
In December 1975 most 5th Brigade units were committed to the border areas of Tucuman with over 5,000 troops deployed in the province. There was however, nothing to prevent infiltrating through this outer ring and the ERP were still strong inside Buenos Aires. Mario Santucho's Christmas offensive opened on 23 December 1975. The operation was dramatic in its impact, with ERP units, supported by Montoneros, mounting a large scale assault against the army supply base Domingo Viejobueno at Monte Chingolo, south of Buenos Aires. The attackers were defeated and driven off with heavy casualties. In this particular battle the ERP had about 1,000 deployed against 1,000 government forces.
During their 1975 stint in Tucuman the Fifth Mountain Brigade killed 160 guerrillas at a cost of 22 officers and 21 other ranks killed and military casualties were proportionally higher there than their US and British counterparts in either Iraq or Afghanistan. Tucuman kept the 5th Brigade occupied, in 1976, it was still necessary to provide military aid to the local security forces, and help to hunt down the one-hundred ERP and Montoneros guerrillas who still roamed in the jungle and mountains.
By mid-1975, the country was a stage for widespread violence. Extreme right-wing death squads used their hunt for far-left guerrillas as a pretext to exterminate any and all ideological opponents on the left and as a cover for common crimes. Assassinations and kidnappings by the Peronist Montoneros and the ERP contributed to the general climate of fear. In July, there was a general strike.
During his brief interlude at the head of the executive power, Ítalo Luder then extended the operation to the whole of the country through decrees 2270, 2271 and 2272 issued on 6 July 1975. The July decrees created a Defense Council headed by the president and including his ministers and the chiefs of the armed forces. It was given the command of the national and provincial police and correctional facilities and its mission was to "annihilate … subversive elements throughout the country". Military control and the state of emergency was thus generalized to all of the country. The "counter-insurgency" tactics used by the French during the 1957 Battle of Algiers (relinquishing of civilian control to the military, state of emergency, block warden system (quadrillage), etc., was perfectly imitated by the Argentine military.
These "annihilation decrees" are the source of the charges against Isabel Perón which led to her arrest in Madrid more than thirty years later, in January 2007, and subsequent extradition to Argentina. The country was then divided into five military zones through a 28 October 1975 military directive of "Struggle Against Subversion". As had been done during the 1957 Battle of Algiers, each zone was divided in subzones and areas, with its corresponding military responsibles. General Antonio Domingo Bussi replaced in December 1975 Acdel Vidas as responsible of the military operations.