$p$-permutation equivalences between blocks of group algebras

We extend the notion of a {$p$-permutation equivalence} between two $p$-blocks $A$ and $B$ of finite groups $G$ and $H$, from the definition in [Boltje-Xu 2008] to a virtual $p$-permutation bimodule whose components have twisted diagonal vertices. It is shown that various invariants of $A$ and $B$ are preserved, including defect groups, fusion systems, and K\"ulshammer-Puig classes. Moreover it is shown that $p$-permutation equivalences have additional surprising properties. They have only one constituent with maximal vertex and the set of $p$-permutation equivalences between $A$ and $B$ is finite (possibly empty). The paper uses new methods: a consequent use of module structures on subgroups of $G\times H$ arising from Brauer constructions which in general are not direct product subgroups, the necessary adaptation of the notion of tensor products between bimodules, and a general formula (stated in these new terms) for the Brauer construction of a tensor product of $p$-permutation bimodules.