* Plan boosts border agents, inspections
* U.S. still considers proposal to send troops to border
* Hillary Clinton to visit Mexico on Wednesday
* Critics say it falls short on immigration enforcement (Adds Obama comments in paragraphs 7 and 22)
WASHINGTON, March 24 (Reuters) - The United States will send more agents and high-tech gear to its southern border to crack down on smuggling of illegal drugs, guns and money by Mexican gangs whose bloody wars threaten security on both sides of the frontier, U.S. officials said.
The strategy aims to fight the growing power and violence of Mexican cartels, which ship billions of dollars worth of drugs into the United States and bring back weapons and cash.
The plan redirects more than $200 million to add more than 500 federal agents to border posts and the Mexican interior.
It will intensify inspections of southbound traffic, with 100 percent inspections of rail lines, mobile X-ray units for cars, and advanced license-plate readers to identify smugglers. It also aims to improve the tracing of guns used in Mexican crimes back to U.S. dealers.
"What we want to do is to better secure the border area against further violence and make it a safe and secure area where the rule of law is upheld and enforced," said Homeland Security Secretary Janet Napolitano who unveiled the plan at the White House.
Secretary of State Hillary Clinton leaves on Wednesday for talks in Mexico on border, economic and climate-change issues.
"We are going to continue to monitor the situation, and if the steps that we've taken do not get the job done, then we will do more," President Barack Obama said in a nationally televised news conference.
Turf wars between the cartels and battles with law enforcement killed more than 6,000 people in Mexico last year. The traffickers spread fear in much of Mexico and have heightened Washington's concerns about the stability of Mexican President Felipe Calderon's government and the violence spilling into the United States.
Calderon has made controlling the violence his top priority and sent 45,000 troops across the country to fight the gangs.
The U.S. plan adds to $700 million already appropriated by Congress to help Mexican law enforcement and military.
Mexican foreign minister Patricia Espinosa called the plan consistent with both governments' determination "to stamp out the trafficking of weapons, illegal chemicals and cash from the United States to Mexico."
After Clinton's trip, Napolitano, Attorney General Eric Holder and Obama are all planning to visit Mexico next month.
CRITICS SAY STRATEGY FALLS SHORT
Some U.S. critics said the new strategy falls short on stemming illegal immigration and containing spillover violence.
"With hundreds of federal law enforcement officers being relocated to the border, we must ensure that we do not undercut our national security and immigration enforcement responsibilities," said Republican Representative Lamar Smith of Texas.
Also on Tuesday, a U.S. official said the administration wants to complete a proposal to resolve a trucking dispute with Mexico before Obama's visit, an increasingly prickly trade issue between the neighbors. [ID:nN24349410]
Deputy Secretary of State Jim Steinberg said U.S.-Mexican ties were "as important as any bilateral relationship that we have."
Mexico is the United States' second largest export market and and third largest overall trading partner. Trade between the two totaled $367.5 billion last year.
Deputy Attorney General David Ogden said a U.S.-Mexican prosecution effort would be modeled after successful efforts to smash Mafia crime syndicates in the United States.
"If you take their money and lock up their leaders, you can loosen their grips on the vast organizations," he said.
Calderon's government has offered rewards of up to $2 million for information leading to the capture of drug lords, including Mexico's most wanted man, Joaquin "Shorty" Guzman. [ID:nN23352596]
Investigators say nine out of 10 guns retrieved from crime scenes in Mexico are traced back to the United States. The United States intercepted 997 firearms and $4.5 million in cash bound for Mexico in the last week alone, Napolitano said.
"We need to do more to make sure that illegal guns and cash aren't flowing back to these cartels," Obama said.
The Obama administration is also considering contingency plans to send National Guard reserves to the border area in case of an outbreak of cross-border violence, Napolitano said.
Texas Governor Rick Perry, who has requested an immediate deployment of 1,000 guard troops, said he was pleased with the Obama administration's attention. But "what we really need are more border patrol agents and officers at the bridges ... as well as additional funding for local law enforcement." [ID:nN24367737]
The U.S. plan would give $59 million to local U.S. authorities for border efforts.
Moody's rating agency said a spike in violence could scare some investors away from Mexico. [ID:nN24341530] (Additional reporting by Tim Gaynor in Phoenix; editing by Chris Wilson and Mohammad Zargham)