Grenade attacks kill 8 on Mexico's national day

(Updates with military presence, death toll)

By Miguel Garcia

MORELIA, Mexico, Sept 16 (Reuters) - Suspected drug gang hitmen threw two grenades into a packed crowd celebrating Mexico's independence day, killing at least eight people and wounding more than 100 in a major escalation of a war between the government and cartels.

The explosions ripped through a square in the Spanish colonial city of Morelia late on Monday, at the height of a boisterous fiesta led by the Michoacan state governor to mark Mexico's national day.

Dozens of wounded people, including women and children, were sprawled in pools of blood. Revelers wandered dazed beside the cathedral in the city, hometown of President Felipe Calderon.

Gov. Leonel Godoy said police suspected the attack was the work of "organized crime" -- a term often used to refer to Mexico's drug cartels. The cartels have killed 2,700 people this year as they fight one another and strike back against an army crackdown.

The traffickers often torture and behead rivals and clash with security forces, but they had not launched an attack with high civilian casualties before.

"We think without doubt that it was organized crime, although this is being investigated by the attorney general's office," Godoy told the Televisa news network.

The head of state's emergency workers said eight had died in the attack but government forensic experts said only seven were confirmed dead with at least one person in serious condition in the hospital. More wounded people packed the halls of local clinics.

Witnesses saw a well-built man dressed in black throw a grenade into the crowd and then apologize to people beside him for what he had done, the governor said.

Mexicans gather in town squares across the country on the night of Sept. 15 to celebrate Roman Catholic priest Miguel Hidalgo's 1810 call for independence when he launched a revolt against Spanish rule by ringing a church bell and shouting "Viva Mexico" to a cheering crowd.

TIMED ATTACK

The first explosion in Morelia went off at the height of a re-enactment of the bell-ringing, an emotional ceremony known as "El Grito" or "The Shout" traditionally held in the central square. A second, almost simultaneous explosion, went off nearby.

"The dead and wounded ... were the poorest people who have no other form of entertainment," Godoy said.

Calderon, a strong-willed conservative, has thrown thousands of troops and federal police into the fight against drug traffickers, but killings have increased.

"This day is a national fiesta, however, cowards hidden in the crowds of patriotic celebrations, a sign of their cowardice, have converted joy into sadness, converted happiness of Mexican families into mourning," Calderon said on Tuesday.

"They are abominable acts that clearly threaten national security, committed by true traitors who do not have any respect for fellow men or for their country," Calderon said ahead of a traditional military parade in the capital to celebrate independence day.

The president has deployed some 45,000 troops across Mexico in an effort to clamp down on drug gangs, but the military has failed to curb the violence.

In the aftermath of the blast, heavily-armed soldiers patrolled Morelia as police collected evidence from the crime scene. Survivors made makeshift memorials, lighting candles in the shape of a cross.

On Friday, police found 24 bodies dumped in wasteland near the capital in one of the drug war's biggest mass killings.

Mexico is the principal trafficking route for Colombian cocaine to U.S. streets. Mexicans have grown hardened to years of drug violence, but the recent spurt in cartel murders and fatal kidnappings has shocked the nation and triggered protests.

More than 150,000 people marched in Mexico City last month to demand more action against crime.

The drug violence exploded about four years ago when Mexico's most-wanted man and drug gang leader, Joaquin "Shorty" Guzman, took on the Gulf cartel in northeastern Mexico for control of the drug trade. (Additional reporting by Alistair Bell and Catherine Bremer)