* Carrillo Fuentes one of Mexico's top traffickers
* Fight to hold Ciudad Juarez provokes killings
* Rampant violence risks support for government drug war
By Julian Cardona
CIUDAD JUAREZ, Mexico, Feb 25 (Reuters) - A Mexican drug lord's turf battle with a more powerful rival is stoking a surge in killings on the U.S. border and threatens to overwhelm President Felipe Calderon's army-led war on traffickers.
Vicente Carrillo Fuentes, long-time head of the Juarez drug cartel, is fighting a brutal offensive by Mexico's most wanted narcotics trafficker for control of Ciudad Juarez, across the border from El Paso, Texas, into one of the world's deadliest cities.
Despite two years of attacks from heavily armed gunmen led by Joaquin "Shorty" Guzman, Carrillo Fuentes, who has a $5 million bounty on his head in the United States, has ceded little ground.
His henchmen have responded by torturing and beheading rivals while continuing to smuggle multi-tonne shipments of cocaine into the United States, U.S. drug officials say.
The turf war has killed more than 4,600 people over the past two years in Ciudad Juarez and forced the government to deploy 8,000 troops and federal police to the manufacturing city. Escalating violence threatens to undermine middle-class support for Calderon's crackdown [ID:nN11183751].
"Vicente is still controlling the smuggling routes through the Juarez-El Paso corridor," said Special Agent Michael Sanders at the U.S. Drug Enforcement Administration in Washington. "He remains one of the DEA's priority targets."
Drug violence, which has killed more than 18,000 people across Mexico since late 2006, worries foreign investors and has led some U.S. companies to halt investment in Ciudad Juarez. Tourism overall in Mexico has also been hit.
A keen horseman who uses a network of cattle ranches in the northern state of Chihuahua to store shipments of Colombian cocaine, Carrillo Fuentes took over the Juarez cartel in 1997 after his brother Amado died during plastic surgery.
Mexican drug officials and much of the country's media have sought to portray Carrillo Fuentes, 47 and a devout Catholic, as badly weakened by the raging violence in Ciudad Juarez.
Federal police say he stumbled badly in 2008 when he tried to charge Guzman -- leader of the northwestern Sinaloa cartel and a former ally -- a tax to smuggle drugs through the desert city. The move triggered Guzman's quest to take the city over and add it to his trafficking empire across the Americas.
STILL IN THE GAME
An earlier blow came when several of Carrillo Fuentes' closest aides defected to the Sinaloa cartel after Guzman escaped from prison in a laundry van in 2001.
Calderon also claimed a big victory last year when soldiers nabbed Carrillo Fuentes' nephew Vicente Carrillo Leyva, accused of being the Juarez cartel's No. 2 operator, in Mexico City.
But drug experts say Carrillo Fuentes, dubbed "The Viceroy" as he played a secondary role in the Juarez cartel when his more flamboyant brother was alive, is still handling about a fifth of Mexico's $40 billion-a-year narcotics business.
They credit him with running a disciplined gang that has allowed him to avoid capture over the past 13 years, even if he has not achieved the notoriety of Amado, who flew jet airliners full of Colombian cocaine into Mexico in the 1990s and became known as "Lord of the Skies.".
"Vicente is an unpretentious man, dresses like a cowboy and moves with few bodyguards. He speaks softly to others. But no one ever doubts who is in charge," said Arizona-based drug trade expert and author Charles Bowden, who has sources close to the Juarez cartel.
Carrillo Fuentes is not thought to live in Ciudad Juarez and little is known about his whereabouts. But he wields crucial influence via his armed wing "La Linea" (The Line) and relies on the loyalty of local spies, lawyers, accountants and dealers to run operations.
Some local politicians say the Carrillo Fuentes family's presence in the city over more than two decades means the Juarez cartel has been able to pay off many in the police and local government and is essentially untouchable.
"The people from the Juarez cartel, La Linea ... have the support of the (Chihuahua) state government and the (Ciudad Juarez) municipal police," said Cesar Jauregui, a politician from Calderon's ruling National Action Party, or PAN, who is running for Ciudad Juarez mayor this year.
Chihuahua officials deny the accusations, saying 70 percent of police in Ciudad Juarez have been cleared of any wrongdoing and the remainder are being retrained or have been fired. (Writing and additional reporting by Robin Emmott; Editing by Eric Walsh)