Updated

Arturo Beltran-Leyva, a notoriously cruel cartel boss and one of Mexico's most wanted criminals, threw a riotous Christmas party two years ago with Grammy-winning musicians, prostitutes, and lavish food and drinks.

U.S. law enforcement agents in Mexico, electronically spying on Beltran-Leyva, relayed detailed information to U.S.-trained Mexican Navy Special Forces, who crashed the fiesta. After a 90-minute shootout, the cartel leader fled with a gut wound.

U.S. detectives next electronically tracked Beltran-Leyva, 48, to a posh apartment in nearby Cuernavaca. With their help, 200 Mexican Special Forces rolled in on tanks and rappelled from helicopters. The next morning, photos of Beltran-Leyva's bloody body, plastered with bank notes, were splashed across Mexican front pages.

At the time, it was considered a rare success in U.S.-Mexico law enforcement cooperation. Now, unprecedented numbers of U.S. law enforcement agents work in Mexico, and high-profile arrests occur monthly. U.S. drones spy on cartel hideouts, while U.S. tracking beacons pinpoint suspect's cars and phones.

"Yes, we're tracking vehicles, yes, we're tracking people," says Brad Barker, president of HALO Corporation, a private security firm that, among other things, helps rescue kidnapped people in Mexico. "There's been a huge spike in agents down there."

The bilateral cooperation is touching off Mexican sensitivities about sovereignty, while stoking U.S. debate about the wisdom of inserting American operatives so deep into the fight. More than 35,000 people have been killed in drug trafficking violence since President Felipe Calderon launched a crackdown four years ago, and the killing of a U.S. agent last month prompted the U.S. Congress to schedule hearings into the role of American personnel.

The U.S. agents generally provide intelligence and training, while Mexicans do the hands-on work. Neither side will say exactly how many agents are in Mexico, citing security concerns, but the Associated Press was able to identify several hundred using the Freedom of Information Act, federal budget requests, government audits, Congressional testimony and agency accountability reports.

The Drug Enforcement Administration has the largest U.S. presence in the drug war, with more than 60 agents in Mexico. Then there are 40 Immigration and Customs Enforcement agents, 20 Marshal Service deputies, 18 Alcohol, Tobacco, Firearms and Explosives agents, and dozens more working for the FBI, Citizen and Immigration Service, Customs and Border Protection, Secret Service, Coast Guard and Transportation Safety Agency.

The State Department's Narcotics Affairs Section staff alone jumped from 19 to 69 in the past three years, according to the U.S. Government Accountability Office.

There are so many State Department narcotics personnel that they took up two entire floors of the U.S. Embassy in Mexico City before moving into a new building with their Mexican counterparts. This is the second so-called fusion center the two countries share in Mexico now.

The U.S. has spent $364 million of the $1.5 billion promised for Mexico since 2008 under the Merida Initiative, a U.S.-Central American joint anti-crime effort, and Mexico will spend about $10.7 billion on public security this year.

Despite close law enforcement collaboration, Mexican officials often play down U.S. involvement to avoid rubbing nationalist raw spots. The sensitivities were evident Wednesday in the angry reaction of Mexican lawmakers to news that U.S. Customs and Border Protection has been operating Predator drones in Mexico for the past two years, while the U.S. military's Global Hawk drone began flying south of the border in March. They said they were not informed by Mexico's National Security Council, which had invited the spy planes in.

Earlier this month, members of Mexico's Congress were infuriated to learn that U.S. agents had allowed hundreds, possibly thousands, of guns to be smuggled into Mexico in undercover operations aimed at busting cartel bosses. Mexico's Attorney General has launched an investigation.

If U.S. agents in Mexico worked on the operation, that "would force us to restate many issues in the relationship," warned Jorge Alberto Lara Rivera, Deputy Attorney General for International Affairs.

Joint enforcement is also controversial north of the border. Notable arrests and seizures were made last year, yet overall, success is less obvious than the dangers. Calls for congressional hearings were prompted by the murder of ICE Agent Jaime Zapata in a highway ambush that also wounded his colleague, Victor Avila. It came less than a year after the murder of three people connected to the U.S. Consulate General in Ciudad Juarez, Mexico.

Republican Rep. Michael McCaul of Texas, who chairs the Homeland Security Oversight and Investigations Subcommittee, demanded to know what plan the U.S. had in mind for fighting the cartels. Justice Department spokeswoman Laura Sweeney declined to disclose specific actions but confirmed that cooperation has intensified and includes sharing information, gathering evidence, extraditing fugitives in both directions, tracing weapons used in crimes, and training prosecutors, investigators and police.

All U.S. agents living and working in Mexico get diplomatic status and are banned from carrying weapons. "They do not kick doors down or accompany guys who kick doors down and make arrests," said a senior US Embassy official, speaking to the AP on condition of anonymity citing security concerns.

Instead, they track beacons secretly attached to cars, they trace cell phone calls, they read e-mails and texts. Using images from drones, they study behavioral patterns of border incursions and follow smuggling routes. And they process massive amounts of data about dealers, enforcers, money launderers and bosses.

Some tracking devices are slapped on cars and phones in the U.S., with judicial permission, before the equipment heads south. Technology ignores borders and continues to show the location of suspects in Mexico.

Samuel Gonzalez, Mexico's former top anti-drug prosecutor, said U.S. agents, who typically require judicial authority to eavesdrop in the U.S., are not restricted by those laws in Mexico, provided they are not on U.S. territory and those they are bugging are not American.

"Simply put, they can hear all the conversations they want without respecting the privacy of individuals, as long as they are not (listening to) Americans," Gonzalez said.

The U.S. has also sent eight helicopters and 78 drug sniffing dogs, as well as 318 polygraph units to screen Mexico's law enforcement applicants for corruption. U.S. agents taught their counterparts to use the machinery.

U.S. experts also have taught hundreds of attorneys to argue in open courtrooms, judges to hear cases, and more than 6,700 soldiers and police to use proper interrogation techniques and technology.

At the same time, more Mexican agents work with the FBI, DEA and other agencies in the U.S. And in an unusual move, the ATF recently invited Mexican investigators to attend a U.S. interrogation of suspected gun traffickers.

U.S. and Mexican law enforcement officials claimed some important achievements last year:

— 14 cartel leaders on the most-wanted list were arrested or killed in Mexico, the most in a given year.

— Cocaine seizures dropped from 20 metric tons in 2009 to 9.4 metric tons because of better monitoring of Mexican seas and airspace, largely assisted by US agents, the State Department says.

— Mexico extradited 94 suspected criminals to the U.S., compared with just 12 a decade ago.

— From September 2009 to July 2010, Mexican judges convicted 37 individuals of money-laundering, up from 17 between 2004 to 2007.

And yet, killings jumped to a record high last year and more heroin and marijuana are being produced in Mexico and smuggled into the U.S. Pressure in Mexico is squeezing the drug trade into Central America, where three times more cocaine is confiscated each year than in Mexico. Meanwhile, U.S. law enforcement manages to stop just a small fraction of the guns, bullets and cash heading south.

"We are aware that we are going through a very difficult time on security issues," Calderon said at a meeting where the government presented a new data system to track drug-related crimes.

More than 61 Mexican law enforcement agents vetted and trained by U.S. partners were killed in Mexico between 2007 and 2009, according to a U.S. State Department cable revealed by the WikiLeaks website. But the U.S. Embassy official said he believed it was because they were in uniform and engaged in a risky fight against organized crime, rather than because of their affiliation with Americans.

As for the Beltran-Levya cartel, the operation against its boss hardly put the family out of business; it is blamed for hundreds of killings last year. But the pressure is constant. Beltran-Levya's brother, who succeeded him, was arrested, and now police say the last brother, Hector, is in charge.

The U.S. State Department is offering $5 million for information leading to Hector Beltran-Leyva's arrest. And U.S. agents on the ground in Mexico are hard at work to figure out exactly where he is.

___

Mendoza reported from Santa Cruz, California.