TOP MEXICAN DRUG LORD KILLED IN SHOOTOUT

Navy Raid in Resort City Hands Victory to Calderon, but Could
Presage a Shake-Up of Violent Narcotics Business

CUERNAVACA, Mexico -- Mexican Navy special forces killed one of the
country's top drug kingpins in a shootout in the central city of
Cuernavaca, notching an important victory in President Felipe
Calderon's three-year-old clampdown on narcotics
trafficking.

The death of Arturo Beltran Leyva 54, who called himself "The Boss
of Bosses" and was one of Mexico's three most-wanted drug lords, came
after a four-hour battle Wednesday evening at a condominium complex in
Cuernavaca, a retirement destination for Americans and weekend getaway
for Mexico City residents.

Four other suspected drug traffickers died, including one who
apparently killed himself rather than be arrested. One Mexican Navy
officer was killed and two sailors were wounded by grenades thrown by
cartel gunmen, the Navy said.

Mexico's operation against Mr. Beltran Leyva is its biggest
success against a top drug lord since the 2003 arrest of Osiel
Cardenas, leader of another drug cartel. It provides a boost to
Mr. Calderon, who has largely staked his presidency on the
deployment of 45,000 Army troops to halt the growing influence of drug
traffickers, perceived as having more power in parts of the country
than the government.

"The reign of Arturo Beltran Leyva is over. His cartel has been
directly responsible for much of the violence plaguing Mexico today,"
said Michele M. Leonhart, acting administrator for the U.S. Drug
Enforcement Administration. She said Mr. Beltran Leyva's
organization smuggled tons of drugs into the U.S. every year for more
than a decade.

But the gains from the killings, however, could be limited.
Intelligence experts say the raid against Mr. Beltran Leyva is
less likely to dent Mexico's trade in illegal drugs -- estimated at
$20 billion annually -- than it is to set off a fresh violence between
cartels fighting over lucrative smuggling routes. Across Mexico, more
than 14,000 people have been killed since Mr. Calderon took power
in December 2006, the vast majority drug dealers and their associates,
according to the government.

Mr. Calderon, attending a climate-change conference in Copenhagen,
praised the Mexican Navy's operation.

The battle ended a six-day cat-and-mouse game between authorities and
Mr. Beltran Leyva. Last week, Navy troops raided a Christmas
party in an enclave of vacation homes near Cuernavaca, arresting what
Mexican police say were 11 cartel hit men and dozens of others
including prostitutes and members of the Grammy-award winning outfit
Ramon Ayala y Sus Bravos del Norte, known for accordion-driven
laments about love and tragedy.

Mr. Ayala hasn't been charged with any crime, Mexico's Attorney
General's Office said.

Wednesday's operation began at 5:30 p.m., according to police and
eyewitnesses, when Navy helicopters began hovering above a condominium
complex near downtown Cuernavaca. Troops wearing black balaclavas and
armed with assault rifles descended on ropes from the helicopters,
securing the area around the buildings.

About two hours later, the shooting began as cartel gunmen fired on
troops. As the battle spread beyond the apartment buildings, Mexican
television showed civilians scurrying for cover as soldiers exchanged
fire with gunmen.

"We were putting up the Christmas tree and wrapping gifts when all
hell broke loose -- pistols, rifle fire and grenades that sounded like
bombs," said Enrique Tapia, a security consultant who lives in a
building about 100 yards from the apartment he said Mr. Beltran
Leyva occupied. "It was like a war."

While the killing of Mr. Beltran Leyva is unlikely to slow drug
trafficking in Mexico -- a leading supplier of marijuana, cocaine,
methamphetamines and heroin to the U.S. market -- it could alter the
balance of power within the Mexican drug underworld, with
unpredictable, violent consequences.

"This doesn't hurt the drugs business down here. What it does is raise
questions about who will fill this guy's shoes -- and do rival gangs
try to take over," said Alberto Islas, a security analyst in Mexico
City. Among the territories that could be up for grabs, Mr. Islas
said, are the state of Morelos, where Cuernavaca is located, and the
resort city of Acapulco.

Much of Mexico's bloodshed in recent years can be traced to a turf war
between Mr. Beltran Leyva and his brothers, and their archrival,
the drug trafficker Joaquin "El Chapo" Guzman, Mexico's most
wanted man. The death of Mr. Beltran Leyva is seen as likely to
strengthen the hand of Mr. Guzman.

A fugitive since his escape from a high-security Mexican prison in
2000, Mr. Guzman has become an increasing embarrassment to the
Mexican government, which has been unable to recapture him. In the
past two years, he has been named to Forbes's billionaire's list, and,
recently, to Forbes list of the world's most powerful people.

Mr. Guzman and the Beltran Leyva brothers grew up in nearby
towns in Sinaloa, the birthplace of most of Mexico's drug-trafficking
organizations, according to a Mexican intelligence report. They worked
in the same cartel, with the Beltran Leyvas acting as the muscle
for Mr. Guzman and other top cartel members. The report says Mr.
Beltran Leyva and Mr. Guzman were "compadres" -- godfathers
for each other's children.

The relationship broke down in January 2008. Mexican troops captured
Mr. Beltran Leyva's brother Alfredo in a Mexico City safehouse.
Arturo Beltran Leyva and another brother, Hector, blamed Mr.
Guzman for Alfredo's capture. The brothers accused Mr.
Guzman of turning in their sibling to authorities in exchange for
official protection, according to the intelligence report. Mexican
officials deny this is the case.

Months later, killers working for the Beltran Leyva brothers
gunned down Mr. Guzman's son, Edgar Guzman, in a parking lot
in Culiacan, Sinaloa's capital.

The rupture set off a bloody battle of shifting alliances in Mexico's
drug underworld for influence in Sinaloa and beyond. The Beltran
Leyva brothers joined up with two other enemies of Mr. Guzman --
including the Juarez Cartel, which has traditionally controlled the
lucrative smuggling point of Ciudad Juarez in Chihuahua state, across
the border from El Paso, Texas.

Since early 2008, Mr. Guzman's forces have tried to capture those
drug-trafficking routes from the Beltran Leyva brothers and their
allies, helping to turn Ciudad Juarez into one of the world's
deadliest cities. More than 4,100 people have been killed in
drug-related violence in Juarez during the past two years, authorities
say.