Peruvian and Cusco flags in the Plaza de Armas, La Merced church tower in background, Cusco, Peru

The 7 striped rainbow flag is the flag of Cusco and hung especially during June when there are several festivals in the city. It is often used elsewhere in the Andes to represent the Andean indigenous people and the Inca Empire / Tawantinsuyu (though there no solid historical evidence that the flag was actually used by the Incas).