The nuclear many body problem is reduced to equations of motion for local physical quantities such as particle density, velocity field and pressure tensor. The approach provides a generalization of the commonly used liquid drop model to the case of the Fermi liquid. The influence of Fermi-surface distortion, relaxation processes and memory effects on the nuclear dynamics is studied. The theory is applied to the description of the giant multipole resonances in cold and hot nuclei. Some features of the Fermi-liquid drop instability and the large amplitude motion are discussed. 2003 Elsevier B.V. All rights reserved.