Grenade attacks raise stakes in Mexico drug war

MEXICO CITY, Mexico Thu Sep 18, 2008 3:22pm EDT

MEXICO CITY, Mexico (Reuters) - Mexico's powerful drug cartels have apparently opened an alarming new chapter in their two-year-old war against President Felipe Calderon's government with their first major attack on civilians.

In a scene that harked back to 1980s killings by Colombian cartels, suspected drug hitmen tossed two grenades into a crowd of revelers celebrating Mexican independence day in a square on Monday night, killing seven people and wounding more than 100.

No group has claimed responsibility for the blasts but the Mexican authorities have blamed drug gangs and there is no doubt in the public mind that they were responsible.

If that is the case, it was the first time Mexican gangs have targeted a large public gathering as they lash back at Calderon's crackdown by the army. Images of blood-spattered toddlers and Mexican flags trampled into debris in the colonial-style city of Morelia shocked the country.

"Mexico, without any doubt, will never be the same. The wound is deep and the damage is brutal," said Juan Carlos Velasco, a deputy for the opposition Institutional Revolutionary Party.

Mexicans have grown hardened to decades of tit-for-tat killings between the rival drug gangs that smuggle crate-loads of Colombian cocaine and other illegal drugs up to the lucrative U.S. market.

The murder rate has soared since Calderon sent the army to battle the cartels, with daylight shootings now common. Bodies and severed heads have piled up as this year's death toll has topped 2,700 and killings turned more brutal.

But few civilians have been killed or wounded -- although occasionally people are hit by stray bullets meant for a gang member or corrupt police officer.

"They have crossed a line from recklessly endangering civilians in their attacks on law-enforcement officials and rival gangs to deliberately targeting innocent men, women and children," U.S. Ambassador Tony Garza said after the blasts in the capital of Calderon's drug-ridden home state of Michoacan.

Taking on smuggling gangs, with their huge stashes of cash and weapons and their use of torture, was always a big political gamble for Calderon, a strong-willed conservative who came to power in late 2006.

Monday's strike, in a country where the broad public is not used to the threat of major attacks by anti-government groups, has ramped up the stakes.

'FURTHER DETERIORATION'

"I don't think it's just a one-off," said Fred Burton, an analyst for the U.S.-based Stratfor security consultancy.

"It's a frightening turn of events. (It's) a move toward further deterioration, a lack of law and order, a tool of terror, with the signal being sent that no one is safe."

Calderon appears to have few options to fight the gangs, apart from the use of military force. The federal government has little control over poorly paid state and municipal police who often accept bribes to work with drug smugglers.

The violence could shave a percentage point off Mexico's economic growth this year as companies shy away from investing, the government says, although tourism is holding up for now.

It was unclear whether attacking Calderon's home turf was meant to send a personal signal to the president but it made his pledge to stamp out drug violence ring hollower than ever.

Calderon, who has high popularity ratings, visited victims of the grenade attack in hospital on Wednesday and called for an end to a culture of tolerance and impunity in Mexico.

But with mid-term congressional elections looming next July, his National Action Party could take a hit.

"At some point people are going to be calling for stability and I'm not so sure this is a situation he is capable of stabilizing," said Burton.

The violence, which took off when drug lord Joaquin "Shorty" Guzman tried to invade the territory of the Gulf cartel south of Texas about four years ago, had already surged in recent weeks. Police say they suspect Guzman, and his turf war with local rivals, may be behind the Morelia attack.

Twenty-four bodies were found near Mexico City last Friday in the biggest mass murder of the drug war and 12 people were beheaded in the Yucatan Peninsula last month.

Common crime is also rising. The murder of a kidnapped teenager from a prominent family triggered angry protests in August when over 150,000 people took to the streets.

After Morelia's carnival was cut brutally short, army patrols added to a grim air hanging over the city.

"People are nervous," said civil protection head Carlos Mandujano.

(Editing by Frances Kerry)

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