US ups border gun checks as Mexico drug deaths jump

(Adds detail on arms seizures, paragraphs 11-14)

MEXICO CITY, Jan 16 (Reuters) - U.S. Attorney General Michael Mukasey on Wednesday promised tougher controls on guns flowing illegally over the U.S. border to Mexico, where drug cartels have murdered 115 people already this month.

Visiting Mexican counterpart Eduardo Medina Mora in his first foreign trip since taking office in November, Mukasey said the spurt in violence in the first two weeks of 2008 dramatized the need to keep up pressure on what he called "drug terrorists".

Mexico, which has been fighting a nationwide war on powerful cartels for the past year, has urged its northern neighbor to stem the flood of U.S. firearms, grenades and military weapons that wind up in the hands of Mexican gangs.

"In a perverse kind of way the level of violence suggests a level of success in dealing with the drug problem," Mukasey told a round-table with foreign media in Mexico City.

"They may very well now be so constricted that they feel a necessity to hit back the way they've hit back. That's not to say we rejoice in the violence, but we have no choice but to continue the pressure and to confront them," he added.

Mukasey said an offer last year by U.S. President George W. Bush to inject $1.4 billion in equipment into Mexico's war on drug cartels was very much alive and should not be held up by the U.S. presidential election this year, as some fear.

Congress is debating the first $550 million chunk of the "Merida Initiative" aid agreed in the town of Merida, Mexico, last year, and Mukasey said the odds of it being approved "ought to be good".

Under the so-called Project Gunrunner, Washington plans to extend "e-trace" tracking software that Mexican investigators can use to trace dealers in the United States where guns seized from drug hitmen often originate.

More U.S. police will be deployed in border towns to check gun dealers' records and work on tip-offs from Mexico to "squeeze weapons off at the source", Mukasey said.

Agents of the U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives last month seized 153 high-powered weapons bound for Mexico, including AK-47 type assault rifles and lightweight pistols designed to pierce bulletproof vests.

They also netted 9,000 bullets, including heavy caliber rounds for tripod-mounted machine guns that have a range of more than a mile (1.6 km).

"We are seeing a spike in attempts (by Mexican cartels) to get their hands on what we call weapons of choice, which are the high-powered, high-capacity fire arms and ammunition," said ATF head agent in Phoenix, William Newell. (Additional reporting by Tim Gaynor in Phoenix; editing by Alan Elsner)