TIJUANA, Mexico - The killers prowled through Loma Bonita in the pre-dawn chill.

In silence, they navigated a labyrinth of wood shacks at the crest of a dirt lane in the blighted Tijuana neighborhood, police say. They were looking for Margarito Saldaña, an easygoing 43-year-old district police commander. They found a house full of sleeping people.

Neighbors quivered at the crack of AK-47 assault rifles blasting inside Saldaña's tiny home. Rafael García, an unemployed laborer who lives nearby, recalled thinking it was "a fireworks show," then sliding under his bed in fear.

In murdering not only Saldaña, but also his wife, Sandra, and their 12-year-old daughter, Valeria, the Loma Bonita killers violated a rarely broken rule of Mexico's drug cartel underworld: Family should remain free from harm. The slayings capped five harrowing hours during which the assassins methodically hunted down and murdered two other police officers and mistakenly killed a 3-year-old boy and his mother.

The brutality of what unfolded here in the overnight hours of Jan. 14 and early Jan. 15 is a grim hallmark of a crisis that has cast a pall over the United States' southern neighbor. Events in three border cities over the past three months illustrate the military and financial power of Mexico's cartels and the extent of their reach into a society shaken by fear.

More than 20,000 Mexican troops and federal police are engaged in a multi-front war with the private armies of rival drug lords, a conflict that is being waged most fiercely along the 2,000-mile length of the U.S.-Mexico border. The proximity of the violence has drawn in the Bush administration, which has proposed a $500 million annual aid package to help President Felipe Calderón c****at what a Government Accountability Office report estimates is Mexico's $23 billion a year drug trade.

A total of more than 4,800 Mexicans were slain in 2006 and 2007, making the murder rate in each of those years twice that of 2005. Law enforcement officials and journalists, politicians and peasants have been gunned down in the wave of violence, which includes mass executions, such as the killings of five people whose bodies were found on a ranch outside Tijuana this month.

Like the increasing number of Mexicans heading over the border in fear, the violence itself is spilling into the United States, where a Border Patrol agent was recently killed while trying to stop suspected traffickers.

Drawing on firepower, savage intimidation and cash, the cartels have come to control key parts of the border, securing smuggling routes for 90 percent of the cocaine flowing into the United States, according to the State Department. At the same time, Mexican soldiers roam streets in armored personnel carriers, attack helicopters patrol the skies, and boats ply the coastal waters.

"The situation is deteriorating," Victor Clark, a Tijuana human rights activist and drug expert, said in an interview. "Drug traffickers are waging a terror campaign. The security of the nation is at stake."

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More than 1,900 miles southeast of Tijuana, the city of Reynosa stretches along the across from south This is Gulf cartel country, a region dominated by the cartel's private army, Los Zetas. Their arsenal befits a military brigade, exceeding those of some Mexican army units.

Led by Heriberto Lazcano Lazcano, Los Zetas are a highly disciplined mercenary squad composed of former elite Mexican troops, including officers trained by the U.S. military before they deserted. The group has become an obsession of Calderón's administration, which has sent more than a thousand troops to Reynosa and neighboring cities.

Soldiers crowd the slender canal bridges that crisscross Reynosa, stopping drivers at random and staring across the cityscape with their fingers on the triggers of heavy weapons. The tense atmosphere has led to mistakes.

On Feb. 16, soldiers fatally shot Sergio Meza Varela, a 28-year-old with no apparent ties to the drug trade, when the car he was riding in didn't stop at a checkpoint. "You're scared to leave your house," Alejandra Salinas, Meza's cousin, said in an interview outside the family tire shop. "We're just in the way."

In Tijuana, Ciudad Juarez and Nuevo Laredo, the growing Sinaloa cartel is fighting rivals over smuggling routes. But in Reynosa, police say, only Mexican soldiers threaten the Gulf cartel's control.

To prepare for battle, Los Zetas have stocked safe houses with antitank weapons, assault rifles, grenades and other heavy weapons, including some that Mexican law enforcement authorities believe once belonged to the U.S. Army.

"How can I fight them?" said Juan Jose Muñoz Salinas, Reynosa's police chief. "It's impossible."

On Feb. 7, soldiers stormed the dusty "El Mezquito" ranch outside Miguel Aleman, west of Reynosa, and found one of the largest illegal arsenals in recent memory: 89 assault rifles, 83,355 rounds of ammunition, and plastic explosives capable of demolishing buildings. Two days later in nearby Nuevo Laredo, soldiers found a weapons cache that included eight military uniforms to be used as disguises.

The mounting evidence that cartels have infiltrated many border police forces has prompted drastic action.

In Reynosa, soldiers disarmed the entire police force in January, leaving them without weapons for 19 days while ballistics tests were conducted. Police officers, who make $625 a month, were also forced to provide voice samples for comparison with recordings of threats made over police radios, Mayor Oscar Luebbert Gutiérrez said in an interview.

"It wasn't worth it," said Muñiz Salinas, the police chief. "They come after us, but it's other authorities that are really involved. Look at the state police, the federal police and the military."

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It was New Year's Day in Tijuana, the hilly city at America's busiest border crossing. City workers prepped for celebrations, but Jesus Alberto Rodriguez Meraz and Saul Ovalle Guerrero, both veteran police officers, had other plans.

They were going to get rich.

The officers stole one ton of marijuana from the Arellano Felix drug cartel. But before they could sell the load they were kidnapped. Four days later their bodies were found, Tijuana's new police chief, Jes¿s Alberto Capella, said in an interview.

The killings barely registered in Mexico, numbed by an avalanche of at least 30 police officer murders in the past three months and dozens more in the past year. Their case illuminates the pervasive police corruption created by drug money.

One of every two police officers murdered in Mexico today is directly involved with drug gangs, according to estimates by police officials, prosecutors and drug experts.

Capella, nicknamed "Tijuana Rambo" because he fought his way out of an assassination attempt shortly before taking office, estimates that 15 percent of the city's 2,300 police officers work for drug cartels, earning a monthly stipend as body guards, kidnappers or assassins. In Baja California alone, Mexican justice officials estimate that 30 percent of the local and federal police force is on a cartel payroll.

"We have the enemy in our house," Capella said.

The killings in Loma Bonita here were related to a police corruption case, Capella and other police officials said. A few days earlier, Tijuana police had killed an officer working as a bodyguard for a drug gang that tried to rob an armored car.

Cartel assassins, using police radios, vowed revenge. Within a week, Saldaña, his family, and two other officers had been murdered.

Some of the killings have come with specific messages taunting Mexican author ities.

During one week in mid-February, six bodies were found with signs lashed to them that included information such as the phone number and address of the Mexican army office set up to receive tips about organized crime. According to analysts, such "narco-messages," some of which are carved into the bodies, are intended to keep residents from reporting tips.

The decline of the Arellano F¿lix cartel's dominance of Tijuana has had the unexpected effect of deepening police corruption.

After one brother was assassinated and two others were arrested, a war erupted because the cartel's new leadership -- including a sister, Enedina -- refused to share territory with the Sinaloa cartel, a police official said on condition of anonymity. Once loyal to the Arellano F¿lix cartel, some police officers switched sides.

"The police became armed wings of the warring cartels," the police official said.

At the same time, tighter border enforcement following the Sept. 11, 2001, terrorist attacks has made it harder for cartels to smuggle drugs into the United States. So the cartels developed a local market by giving out free samples of drugs, according to Clark, the Tijuana-based drug expert and human rights activist.

The estimated number of addicts in Tijuana doubled from 100,000 in 2004 to 200,000 in 2007, Clark said. The number of small stores or houses where drugs are sold increased fivefold -- to 20,000 outlets -- over that time. Each outlet pays protection money to police, so their proliferation meant more payoffs.

In response, authorities in Baja California and several other border states have begun giving police lie-detector tests. The questions range from the innocuous to queries such as "Have you ever worked with a drug trafficker?"

Rommel Moreno Manjarrez, Baja California's attorney general, said in an interview that out of every 1,000 officers tested, 700 fail.

"It's impossible for the narco to succeed without the help of the police," he said. "The success that the narco has been having is because of the police."

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About 20 minutes south of Tijuana, high-rise condominiums line the coast near Rosarito Beach. Once a sleepy hideaway for

stars, the town had over time exploded into a gaudy party magnet, drawing tourists to the beach and the studio where the movies "Titanic" and "Master and Commander" were filmed.

Rosarito's further transformation has been propelled by drug money and culture, turning the surfer's haven into a key transshipment point for cocaine, marijuana and methamphetamines. City hall is now an armed encampment. Soldiers in armored personnel carriers guard the front entrance.

The new police chief, Jorge Eduardo Montero Alvarez, now occupies an office inside the cordon. His headquarters was rendered uninhabitable by a December attack.

Investigators believe Rosarito Beach police -- working on behalf of the drug gangs -- were behind the attack, which killed one of Montero Alvarez's bodyguards. Days later, Mexican soldiers disarmed the entire 149-officer Rosarito police force.

"I'm more afraid of the police than the narcos," said Jorge Luis Quiñones, a Rosarito Beach physician and businessman, reflecting a feeling that has built for years among many of the surrounding area's 150,000 residents.

In June 2006, three Rosarito Beach police officers were beheaded. For Hugo Torres Chabert, scion of the wealthy family that founded the famed Rosarito Beach Hotel, it was a grim wakeup call.

Convinced that almost every level of the city's government had become tainted with drug money, Torres Chabert ran for mayor and won. Soon after taking office last December, he fired 80 of the city's 500 employees. But he says he hasn't been able to press for arrests for lack of evidence.

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"They were corrupt, but not stupid," he said.

To the children of Rosarito Beach, narco gunmen had already became local heroes because they drove the fanciest cars, wore the latest styles and acted like they owned the town. "Black commandos," the drug cartel hit men, began openly flashing their weapons, snorting cocaine and strutting through the beach town.

"It became impossible to avoid drug dealers -- your kids go to school with their kids," Aurelio Castañeda, a Rosarito Beach bar owner and merchants association official, said in an interview. "You'd go to a bathroom in a bar, and they'd be selling cocaine. They don't even try to hide it, and there was nothing you could do about it, nobody you could turn to."

Casta¿eda's once-busy bar, El Torito, is often empty. He says his business is down 80 percent since 2001, when Rosarito Beach's drug violence spiked, scaring off most surfers and other tourists.

Beyond the flash of the bars and hotels, Rosarito Beach is a warren of impoverished neighborhoods where developers, after paying off city officials, did not bother to install water lines or electrical connections. The dismal living conditions created fertile recruiting grounds for drug traffickers, who have found many willing to "mule" their product across the border for $500 a trip.

But great quantities of drugs stay in Rosarito and are sold at hundreds of convenience stores or private homes that thrive under police protection. Not long ago, a Baja California journalist began digging into the problem. The cartels found out and, in a series of phone calls, threatened to kill him.

It wasn't the first time. He'd had enough. Terrified, the journalist left the business.

"I was saying to myself, 'This is an important subject,' " the journalist said on condition of anonymity, fearing for his safety. "But I wasn't willing to lose my life over it."