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TECATE, Mexico | Wed Sep 23, 2009 8:40am EDT

TECATE, Mexico (Reuters) - Mexico's violent drug gangs are increasingly kidnapping illegal migrants for ransom and forcing them to carry narcotics into the United States as they muscle into the lucrative trade of smuggling people across the border.

Traffickers armed with automatic weapons are snatching weary Mexican and Central American migrants on both sides of the border and holding them in cramped houses with little water or food until families pay ransoms of up to $12,000.

The Mexican army and U.S. border officials say that those who cannot pay are killed, stripped and dumped in shallow graves in remote stretches of the desert frontier.

"My sons were tricked, tortured and then killed by the smugglers," said Esmeralda Guerrero outside the morgue in the barren town of Tecate across from California, where she came to identify the bodies of her two sons in their 20s last month.

"They kidnapped them and demanded $4,000 to keep them alive. It took me two days to send the money. They didn't wait," said Guerrero, whose sons trekked up from Mexico City.

Tecate is a route favored by smugglers for its remote terrain and proximity to San Diego, a large U.S. city and a gateway to Los Angeles, where many illegal aliens are able to blend in and find work.

U.S. authorities on Tuesday closed the San Ysidro border crossing between the Mexican city of Tijuana and San Diego -- it is the world's busiest land border -- after a shootout between suspected Mexican human traffickers and U.S. agents.

Four people were wounded in the shootout, which occurred after the agents tried to stop three vans packed with about 70 illegal immigrants from running the crossing, U.S. officials said.

DRUG MULES

But migrant abductions are border-wide.

Mexican soldiers stormed a suburban house in the factory city of Reynosa across from Texas last month to rescue more than 120 kidnapped Central Americans who were huddled together and watched over by men with guns and baseball bats.

Despite the worst U.S. recession in decades, poor Latin Americans are still trying to cross illegally into the United States in search of higher wages than at home, walking for days through hot desert or swimming the Rio Grande.

Powerful drug cartels began taking over the trafficking of undocumented migrants into the United States at the start of the decade, seeking to make even bigger profits along their trafficking routes and pushing out small-time smugglers.

Tightened U.S. border security has boosted smuggling fees, and even without kidnap ransoms, immigrant smuggling generates $2 billion a year just in Arizona, U.S. officials say.

As rival gangs wage a lethal war over drug routes into the United States, cartels are kidnapping each others' immigrants or turning on their own clients, using them to smuggle drugs.

"The kidnapping of migrants is happening in both Mexico and the United States ... and it is on the rise," said Mexico's consul-general in San Diego, Maria de los Remedios Gomez.

The Gulf cartel from northeastern Mexico and the Sinaloa gang from the Pacific coast are battling for control of trafficking into the United States and have moved into migrant smuggling.

"It has either been taken over by the drug cartels completely, or, because they control the routes, the traditional coyotes (smugglers) pay tariffs for the use of the corridor," Arizona Attorney General Terry Goddard said of smuggling in his state. "I suspect it is a bit of both."

Many migrants are kidnapped on the Mexican side. Some make it to safe houses in U.S. cities such as Phoenix but are then prevented from leaving until they drum up more money. Others are abducted by rival gangs who storm the houses.

The cartels' diversification into migrant trafficking poses another challenge to President Felipe Calderon as he fights a war that has killed more than 14,000 people since he took office in late 2006.

U.S. President Barack Obama has praised Calderon's fight as "courageous" and wants to stop drug crime from spilling over from Mexico but the violence is escalating.

Even as troops patrol Mexican streets and capture senior traffickers, shootouts continue, frightening off tourists from border towns and worrying investors in recession-hobbled Mexico.

The U.S. Border Patrol says it is now common to see immigrants acting as drug mules.

"A lot of these illegal aliens are victims of the drug cartels and are being told by the smugglers: 'Cross this bundle and you'll receive money compensation,'" said Tucson sector Border Patrol spokesman George Gomez, adding that even children have been caught carrying drugs.

(Additional reporting by Tim Gaynor in Phoenix and Robin Emmott in Monterrey; Writing by Robin Emmott; Editing by Paul Simao)

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