El Encuentro is very popular among both locals and tourists. At lunchtime, there is a "menu del dia" which consists of bread, soup, salad, your choice between two entrees and tea, all for the price of 6 soles (US $2). Usually, the soup and and at least one of the entrees is vegan. If not, you can always order a la carte from the extensive menu, which contains vegetarian versions of traditional Peruvian dishes (lomo saltado, chincherron), plus stuffed pancakes, vegetarian pasta dishes with faux meat, and a selection of soups and salads.
The restaurant is fairly small and if you visit during prime lunch hours (noon-2 PM), you will likely have to share your table with strangers. The bathroom is claustrophobia-inducing. In spite of these shortcomings, you won't find a better deal on vegetarian food in Cuzco.