Amazingly the pilot and co-pilot were pulled to safety and survived.
A surveillance camera shows a couple of residents walking next to a building before the Peruvian Air Force aircraft barreled through a row of wires dangling from street poles.
Captains Julio Pinedo Centurión and Juan Carlos Valdivia Rodríguez were rescued from the wrecked plane by four firefighting units before the injured servicemen were taken to the Peruvian Air Force Central Hospital on Monday morning.
According to Peruvian newspaper El Comercio, the pilot, Pinedo Centurión, suffered severe bruises.
The sudden impact crushed an SUV on the quiet street in the coastal town of Surco, a district in the Peruvian capital city of Lima.
Residents rushed out of nearby homes and businesses to help the injured pilots who were stuck inside the tiny plane.
The accident occurred just eight blocks away from the Las Palmas Air Force Base.
Military officials said the military officers were conducting a routine instructional flight and were returning to the base when the accident happened.
Investigators are still determining what made the plane malfunction.