U.S., MEXICO CLASH OVER USE OF GUNS IN DRUG WAR

WASHINGTON, Dec 16 (Reuters) - U.S. and Mexican officials failed to bridge
their main difference in the war on drugs, the operation of armed U.S.
agents inside Mexico, participants at a two-day strategy meeting said on
Wednesday.

Mexican Foreign Minister Rosario Green said Mexico was not prepared to allow
U.S. Drug Enforcement Administration agents to carry weapons inside its
territory.

She also would not rule out taking legal action against U.S. Customs agents
that operated secretly in Mexico to uncover a money-laundering ring using
Mexican banks.

"This is still being investigated," Mexican Attorney General Jorge Madrazo
said at a news conference with White House drug policy czar, Gen. Barry
McCaffrey.

Operation Casablanca was the largest U.S. crackdown against laundering of
drug profits. Some 150 people were arrested in May, including two dozen
employees of Mexico's major banks.

But it was carried out behind the Mexican government's back, severely
straining cooperation in the drug war. Mexico, historically sensitive about
U.S. encroachment on national sovereignty, said it would seek to extradite
the U.S. agents.

"That's an issue that is still being discussed," said U.S. Customs Service
director Ray Kelly after the meeting.

Top U.S. and Mexican officials exchanged information for two days on their
actions against drug cartels that smuggle billions of dollars of South
American cocaine and other narcotics through Mexico and into the United
States.

The officials also met with U.S. members of Congress who are skeptical about
Mexico's efforts to fight corruption and stop the flow of drugs onto U.S.
streets.

Sen. Dianne Feinstein of California said she told the officials of her
concern that drug cartels had won new power in Mexico, moving their
operations into the Yucatan Peninsula.

Feinstein, a Democrat and member of the Senate Foreign Relations Committee,
also raised the issue of extradition, saying Mexico must do more to capture
Mexican drug lords and bring them to trial in the United States.

"For me the most pivotal issue in the war against drugs is the arrest and
extradition of the cartel leadership," she told reporters.

Feinstein said Mexico had arrested the Amezcua brothers, who controled
methamphetamine production and trafficking into the United States, but a
Mexican court had not convicted them. "I would be hopeful that they will be
extradited," she said.

The meeting with a half dozen senators and representatives came two months
before the Clinton administration must send to congress an annual evaluation
of the drug-fighting record of major countries involved in drug production
and trafficking.

DEA officials say two-thirds of the South American cocaine sold in the
United States comes throguh Mexico.

Feinstein has insisted that Mexico allow DEA agents to carry weapons when
they operate south of the border, an issue that makes Mexicans bristle.

Other politicians, such as Californian Congressman Xavier Becerra, believe
that is already happening.

"The whole issue of U.S. agents carrying weapons on the Mexican side is
still a thorn," Becerra told reporters.

"Some folks are not willing to admit that it already occurs, that U.S.
agents already carry weapons on the Mexican side," Becerra said. "The
Mexicans won't admit that. The U.S. won't admit that, but to some degree it
already occurs."

Becerra said the level of cooperation between Mexico and the United States
on law enforcement issues is much greater than the governments are willing
to admit publicly, and that Mexican statements on extraditing U.S. agents
are just "puff."

Checked-by: Rolf Ernst