UPDATE 1-Mexico captures son of top Sinaloa drug lord

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By Miguel Angel Gutierrez

MEXICO CITY, March 19 (Reuters) - Mexico said on Thursday it had captured the drug smuggler son of a leader of Mexico's powerful Sinaloa cartel, one of the highest-profile catches of the government's two-year war on drug gangs.

Soldiers and federal police pounced on Vicente Zambada Niebla, the son of Ismael "El Mayo" Zambada, who is wanted in the United States, in a posh residential area in the south of Mexico City following calls from neighbors. No shots were fired during the arrest, the attorney general's office said.

El Mayo runs the ruthless Sinaloa coalition along with the country's most-wanted fugitive, Joaquin "Shorty" Guzman. Last week Forbes Magazine estimated Guzman's wealth at $1 billion.

Zambada Niebla's arrest is the latest blow to the cartel based on Mexico's Pacific coast after El Mayo's brother Jesus was captured in 2008, but the gang still wields enormous power, trafficking billions of dollars a year of South American cocaine and other drugs into California and Texas.

President Felipe Calderon's army-backed crackdown on drug cartels has become the biggest test of his presidency after turf wars between rival cartels killed some 6,300 people across Mexico last year, posing a threat to investment and tourism.

The United States is worried the violence could seep over the countries' shared border.

Zambada Niebla, also known as "Vicentillo," ran smuggling operations in parts of the cartel's territory and ordered executions of rivals, said Ricardo Cabrera, a director in the drug trafficking unit of the attorney general's office.

Presenting him to the media, Cabrera said his capture would "significantly affect" the group's operating range and trafficking capacity.

Wearing a dark blazer and pressed shirt, Zambada Niebla, 33, was stone-faced as he was lined up with five men arrested with him after neighbors called police to report armed men on the street.

Last October, police arrested El Mayo's brother -- Jesus "The King" Zambada -- after a gun battle in another Mexico City neighborhood. (Writing by Cyntia Barrera Diaz; Editing by Catherine Bremer)