Mexico rocked as rebels storm holiday resorts

At least 13 people died in fierce fighting between left-wing guerrillas and police in Mexico yesterday.

The attacks were centred on the Mexican states of Oaxaca, Guerrero and Chiapas and were believed to be the work of a shadowy group called the Popular Revolutionary Army (EPR).

The Oaxaca state governor, Diodoro Carrasco, said officials there were caught by surprise on Wednesday night when the first raids were launched. Previously, there had been only rumours of rebels in the southern state, he said.

Mr Carrasco said that around 80 men attacked the town plaza, the federal prosecutor's office, federal police and a naval base in the resort city of Huatusco, which is about 100 miles south of the state capital, Oaxaca City.

The governor said nine people were killed in Oaxaca state: two city police, three sailors, two civilians and two rebels. Despite this area being popular with tourists, none of those killed were holidaymakers.

None of the attackers was captured.

The attacks have sent a shock-wave through Mexico's fragile financial foundations, alarming investors, holidaymakers and international onlookers alike. They confirm that earlier attacks by rebels in the restive southern states were more than a flash in the pan. There is now an organised insurgency at work in two of Mexico's poorest, most rural and under-developed states.

The ruling Institutional Revolutionary Party (PRI), already shaken by the Zapatista revolt, will now have to face a fresh threat from the country - and in an area which attracts many tourists.

Guerrero attracts visitors to resorts such as Acapulco, but just a few miles away from the lavish beach resorts the peasant population has long agitated against endemic poverty, authoritarian rule and human- rights abuses. The PRI, which has dominated Mexico since the revolution, has been making attempts at political reform, but its free market policies have stirred discontent in one of the world's large international debtor nations.

The instability of the country has increasingly worried policy makers north of the border, and a fresh bout of civil unrest will alarm Washington. The Clinton administration has gone out of its way to assist Mexico through loans and political support.

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