"For the moment we know that 10 people lost their lives but it has not been determined whether they were soldiers or presumed traffickers," the director of the Guerrero state investigative police, Valentin Diaz, told AFP.

Diaz said the shoot-out took place in the municipal cemetery in Taxco, a silver center 170 kilometers (102 miles) south of Mexico City that draws large numbers of tourists.

The clash followed a violent day Monday in which 28 prisoners were killed in a jail in the northeastern state of Sinaloa and 12 police lost their lives in an ambush in the western state of Michoacan.

earlier related report
Caribbean mulls drug war military outlays
Kingston, Jamaica (UPI) Jun 14, 2010 - Caribbean states, already under strain because of high costs of imported fuel, now face huge demands on their finances to build up military and police forces to fight an escalating drug war in the islands.

The Obama administration has offered, and in some cases been asked, to help with the military and police modernization required to confront drug gangs that have spilled into the Caribbean as Mexico, with U.S. help, expands its campaign to plug Central American drug supply routes to the United States.

U.S. Secretary of State Hillary Clinton promised Caribbean nations more help with the war on drug gangs. But logistics are tough in a vast array of island states and hundreds of miles of open coastlines frequented by tourists.

Drug gangs have capitalized on the islands' lax security, most of which is a response to the authorities' fear of scaring away tourism. Some of the most frequently visited tourist resorts are fast turning into hubs for drug mules traveling between the Caribbean Islands, Central America and U.S. drug smuggling rings.

The problem came under the spotlight when security forces confronted supporters of an accused drug lord, Christopher "Dudus" Coke, wanted for extradition to the United States. The resulting violence killed at least 73 people.

Since that gun battle in Jamaica last month, drug gangs have attacked police and a drug rehabilitation center, killing and wounding several dozen people.

Clinton told regional foreign ministers at a meeting in Barbados the U.S. administration would offer the Caribbean its experience in Colombia, Mexico and Central America.

Caribbean officials said regional governments would be looking to Washington for cash and military and police equipment and training. The U.S. program against drugs in Mexico, launched in 2007, is costing at least $1.4 billion.

U.S. spending on the campaign in the region as a whole is likely to exceed that allocation as cocaine flow through the Caribbean increases in a direct correlation with the current clampdown in Mexico. U.S. Drug Enforcement Administration estimates said three-quarters of South American cocaine was going through Central America and a smaller quantity passing through the Caribbean.

As U.S. and regional authorities try to stem the flow through Central America, much of that traffic is now moving through the Caribbean.

Clinton's pledge of $79 million security aid to the Caribbean in fiscal year 2011 -- a major increase from $45 million in 2010 -- would likely require supplementary aid as the Caribbean nations find themselves increasingly at the mercy of armed drug gangs.

Jamaican Prime Minister Bruce Golding faced fresh allegations that his government was unable to deal with Coke because the gang leader's support to the ruling Jamaica Labor Party.

Coke has survived numerous attempts to end his supremacy in the drug trade since the 1980s, when he won notoriety as the leader of a "Shower Posse," a ruthless group known to have killed hundreds of people by showering them with bullets.

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