Largely invisible to most Americans, just to the south, the security situation is worsening as a result of an intense conflict between the Mexican government and domestic drug cartels -- and even among the narco-gangs themselves.

Some observers have characterized the fighting in Mexico as a low-grade civil war. Worse yet, by many estimates, the violence is escalating -- and getting increasingly grisly. For instance, in January, Mexican authorities arrested a man accused of dissolving as many as 300 bodies in bubbling vats of acid for a Tijuana-based drug lord, earning him the nightmarish nickname "El Pozolero," after a local stew. The same week, Mexican prosecutors reported three severed heads found in an ice box. A headless body was also discovered in a canal in Ciudad Juarez, a town known as Mexico's deadliest -- just over the border from El Paso, Texas. Last year, the drug war in Mexico consumed nearly 6,000 lives -- double the number in 2007.

Drug trafficking organizations already control stretches of the Mexican side of the border, which according to some experts could bring the Mexican government to its knees in the coming years. Worse yet, it also has the potential of spilling north across the border -- in an ever bigger way.

One American congressman called it a "life-or-death struggle." Mexican President Felipe Calderon described drug violence as a threat to the Mexican state. Some have said Mexico is perched on the abyss. By all accounts, the federal government, politicians, the military and police are under the gun -- literally and figuratively -- by criminal gangs and drug lords, looking to deter or prevent interference in their shady dealings.

The public is ruthlessly intimidated by kidnappings and violence. Recent press reports have indicated an uptick in citizen vigilante groups to oppose the drug gangs, which could lead to paramilitarism and spiraling levels of bloodshed and instability. But some believe the majority of violence is among rival cartels, especially the four biggest -- Sinaloa, Gulf, Juarez and Tijuana -- in a deadly turf struggle, with the public and the government caught in the middle.

While the seven major cartels are present in most of Mexico's 31 states and one federal district, most of the violence takes place along the Mexican side of the 2,000-mile U.S.-Mexican border. It's no surprise: The Mexican illegal drug business may be worth as much as $25 billion to $40 billion annually, shipping hundreds of tons of methamphetamine, marijuana, cocaine and heroin into the U.S.

Mexican cartels have been around for a while but have become increasingly prominent -- and powerful -- as drug routes north have shifted westward into Mexico, especially since the demise of the Colombian Cali and Medellin cartels in the 1990s. They come well-armed for their fights, bringing automatic weapons, powerful handguns, .50-caliber sniper rifles, grenades, rocket-propelled grenade launchers and even land mines to bear. Like a modern military, they wear night-vision goggles, move by helicopters and transport drugs in submersibles built in Latin American jungles. Their means of communications are impressive, too, incorporating Voice over Internet Protocol (VOIP), satellite technology, cell phone text and encrypted messaging, according to the U.S. National Drug intelligence Center (NDIC).

Some of the cartels have "enforcer gangs," known as sicarios, which use extreme violence to protect their interests. In some cases, observers say these gangs are private armies in the cartels' employ, serving as hit squads. (Some, such as the Zetas, are former commandos.)

Adding to the challenge, Mexican gangs (many associated with the cartels) smuggle drugs, firearms and illegal aliens across the U.S.-Mexico border, especially through South Texas and California, according to the U.S. Justice Department.

Calderon, who took office in 2006, is game for a fight, including the deployment of 40,000 army troops, but he's up against rampant corruption that reaches deep into his anti-drug forces. Despite a new program to stamp it out called Operation Clean House, drug-related corruption seems rife among the security services, meaning missing drug seizures and cartel members eluding capture -- even escaping incarceration.

The Mexican judicial system is also a major problem in the fight against the drug scourge. It's plagued by bribery, reluctant judges, lack of investigative resources and overloaded courts.

The police are poorly paid, equipped and trained, leaving them no match for the well-armed narcotraficantes. It's dangerous work, too: Mexico's national police chief was assassinated last year.

Although perhaps overstating the case, some former U.S. government officials with knowledge of the situation have postulated that in as little five years, the cartels could, in essence, be running Mexico. Indeed, U.S. Joint Forces Command's "Joint Operating Environment 2008: Challenges and Implications for the Future Joint Force" recently reported: "In particular, the growing assaults by the drug cartels and their thugs on the Mexican government over the past several years reminds one that an unstable Mexico could represent a homeland security problem of immense proportions."

Unfortunately, we're entangled in Mexico's lurch toward instability. According to the NDIC, Mexican drug traffickers are "the most pervasive organizational threat to the United States. They are active in every region of the country and dominate the illicit drug trade in every area except the Northeast."

Drug use in the U.S. hasn't declined appreciably in recent years, according to experts, despite the federal government spending nearly $15 billion annually on prevention, interdiction and rehabilitation. Even more brazen, Mexican drug gangs are using U.S. public lands in the West to cultivate marijuana. They've also shifted methamphetamine operations from Mexico to California, according to the U.S. Justice Department.

Lots of weapons in Mexico come from this side of the border; indeed, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) asserts a majority of the cartels' weapons come from the U.S., especially via gang networks operating in the Southwest. Mexico City has also expressed concerns to Washington about precursor chemicals coming in from the U.S. that are then used by the cartels in the production of narcotics.

Another problem, according to experts, is that little inspection is done on the 100 million vehicles and trucks entering or leaving Mexico annually at 25 crossing points, leading to plenty of finger-pointing on both sides.

As a result, popular support for Calderon's fight against the cartels has waned; because of the widespread violence, many Mexicans are for throwing in the towel, saying drugs are an American problem. But that clearly wouldn't be good for either of us. If Mexico, a country of 110 million people, becomes even a near narcostate, the effect on the U.S. -- make that the Western Hemisphere -- is almost incalculable.

If the cartels were to seize tracts of Mexican territory, it could lead to the establishment of lawless, ungoverned spaces, which are favored by bad actors such as terrorists. (Think: Pakistan's tribal areas -- home to al-Qaida and the Taliban.) Terrorists could certainly exploit successful drug smuggling routes to bring people and explosives or even weapons of mass destruction across the border into the U.S.

Beyond all this, there's a lot more at stake for American interests in Mexico, the third-most populous country in this hemisphere (after the U.S. and Brazil). Mexico has the world's 13th-largest economy -- with significant American investment. It's our second-largest trading partner. Mexico is our third-largest oil supplier and the world's eighth-largest exporter. It's got lots of natural gas, too.

A number of American officials have said that no country is more important to the U.S. than Mexico. Considering its proximity, that's arguably correct. So what can or should be done?

Most security analysts agree that Mexico must take the lead against this very capable, resourceful foe. Yet it's not likely that Mexico City could successfully go it alone, despite a nearly 30 percent increase in security spending in 2007.

As usual, while Washington concedes the last thing we need is a narcostate in Mexico in the coming decades, not everyone agrees how to move forward with Mexico City.

One way is through programs such as the Mérida Law Enforcement Initiative, a U.S.-assisted, Mexican-Central American-Caribbean counterdrug program, launched last year. The Mérida Initiative, which was barely passed by Congress because of human rights concerns, is considered a new paradigm for joint cooperation between Mexico and the U.S. It recalls the successful "Plan Colombia," initiated in 2000 between Washington and Bogotá which led to the demise of the FARC narco-terrorist group. But it doesn't put U.S. boots on the ground in Mexico.

While the program is a step in the right direction, the plan isn't without critics. Some complain the 30-plus Mérida programs are too long on "software" (e.g., command and control, intelligence collection gear) and too short on "hardware" (planes and helicopters) to meet immediate needs.

Others criticize the plan because it doesn't sufficiently address the problems of poverty, corruption and judicial reform that are critical to confronting the challenge in a comprehensive manner. Time is of the essence.

The situation is increasingly grave with an average of 15 people being killed in narcotics-related violence in Mexico every day. Programs such as Mérida must be funded, indeed, bolstered, if we're to stem a rising tide of trouble across the border.

Peter Brookes is senior fellow for National Security Affairs in the Davis Institute at The Heritage Foundation.