CUERNAVACA, Mexico (AP) — A battle for control of a brutal cartel has brought the drug war closer to the heart of Mexico, terrifying this city of bougainvilleas, swimming pools and yearlong warm weather that have made it a popular retreat for the capital's elite and U.S. retirees.

Cuernavaca, nicknamed the "City of Eternal Spring," has erupted in violence since a gunbattle at a luxury apartment building here killed a notorious drug kingpin, unleashing the fight for control of his organization.

Bodies have been hung from overpasses, dumped outside police headquarters or left on busy streets with their faces skinned. Mysterious e-mails have warned people to stay home after nightfall and to avoid driving the kind of pickup trucks and SUVs favored by drug lords, lest they become caught up in a deadly dispute between rival gangs.

Schools and offices sent students and workers home early when the messages first circulated nearly two weeks ago. Nighttime classes in at least one private university were canceled. Bars and restaurants shut their doors, some for two days.

Business has still not picked up. A handful of tourists strolled through the aisles at a crafts market this week, where about half the stands remained closed.

"What they wanted was to frighten people and that's exactly what they did," said Jose Luis Rodriguez, a silver-jewelry vendor who shut down his stand and rushed home last week after hearing about the warning. He said his sales have dropped by more than half.

"There is still fear that someone could come and throw a grenade or open fire," Rodriguez said, checking out a front-page newspaper photo of a man who had been shot in the face.

Cuernavaca, a city of 350,000 with mild weather and rich vegetation just 40 miles (65 kilometers) south of Mexico City, has been a favorite retreat for the rich and powerful since the days of the Aztec Empire. It is known for its charming Spanish-colonial downtown and for posh homes with lush gardens and swimming pools.

The city also has attracted powerful drug lords, whose wealth has quietly blended in amid the gated mansions and upscale apartment buildings. Most law-abiding residents have seemed content to ignore rumors of drug traffickers living in their midst.

That fragile tranquility was shattered when marines raided an apartment complex in December, killing kingpin Arturo Beltran Leyva during a two-hour shootout while residents cowered in the gym. Authorities say his brother, Hector Beltran Leyva, has been fighting for control of the cartel against Edgar Valdez Villarreal, a U.S.-born man known as "La Barbie" who has become one of Mexico's most elusive drug suspects.

Hector Beltran Leyva reportedly signed one of the threatening e-mails that was distributed among city residents. Authorities have remained silent about the authenticity of the e-mail, even as local television stations have taken it seriously.

The Juarez 4 nightclub was one of the few establishments that opened the night the e-mail circulated, on April 16. Nobody showed up.

Last weekend was only a little better; about a third of the normal clientele came to the two-story club adorned with pirate mannequins hanging from ropes and sitting on barrels.

"This is a city that depends on tourism and what violence has done is collapse our economy," said club owner Andres Remis, president of the Cuernavacan Nightclubs and Bars Association. "The only thing that we can do is to wait for one of the groups to win or for the army to win."

More than 50 people have been killed this year in Cuernavaca's gang battles.

The federal government insists it is steadily wiping out the once-powerful Beltran Leyva cartel. Two of the Beltran Leyva brothers are behind bars. Last week, troops captured Jose Gerardo Alvarez, another purported leader of the gang who had a $2 million U.S. bounty on his head.

Troops fought Alvarez and his men in a wealthy neighborhood on the outskirts of Mexico City, leaving three people dead. The battle brought closer to the capital the kind of bloody conflicts that have often rattled states on the northern border and the country's two coasts.

Authorities say Alvarez, known as "El Indio," was behind much of the fight for control of the Beltran Leyva cartel, both in Cuernavaca and the Pacific resort city of Acapulco to the southwest.

The U.S. State Department hailed his capture, saying Alvarez has overseen major deals involving the trafficking of crystal methamphetamine and other drugs between Mexico, Central America, South America and the United States.

President Felipe Calderon counts the downfall of the Beltran Leyva brothers as one of the biggest accomplishments of his military-led offensive against drug traffickers.

Calderon has deployed tens of thousands of troops and federal police across the country since taking office in December 2006, a campaign the U.S. has backed with training and equipment through a $1.3 billion aid package.

Drug-gang violence has since soared though, claiming nearly 23,000 lives throughout Mexico, with Cuernavaca becoming the latest front.

"We hadn't seen this violence before," said Dawn Housand, a 60-year-old Boston native who moved to Cuernavaca more than 10 years ago looking for a quiet place to live. "I don't have the money to move. If I did, I would leave."


Associated Press Writer Oswald Alonso contributed to this report.