Senator Eliot Shapleigh - El Paso, Texas

Shaul Schwarz / Getty Images for Newsweek

Late one night in January, an ambulance escorted by five unmarked squad cars pulled up to Thomason Hospital in El Paso, Texas. Out leaped more than a dozen armed federal agents to protect the patient—Fernando Lozano Sandoval, a commander with the Chihuahua State Investigations Agency. He'd been pumped full of bullets just across the Mexican border in Ciudad Juárez by gunmen believed to have been hired by a drug cartel. Lozano Sandoval's sole hope of survival was the medical team at Thomason, the only level-one trauma center for nearly 300 miles. U.S. authorities took no chances; in Mexico, assassins regularly raid hospitals to finish off their prey. Throughout Lozano Sandoval's three-week treatment at Thomason (which proved successful), the Americans funneled visitors through metal detectors, posted guards outside the commander's room and deployed SWAT teams armed with assault rifles around the hospital's perimeter. Officers "were ready for war if it should go that route," says El Paso Police Chief Greg Allen.

Lozano Sandoval was the first in a string of victims of Mexico's spiraling violence to show up at Thomason this year. Twice more, authorities beefed up security at the hospital to the strictest level—in June, when a high-risk Mexican national was brought in anonymously, and in July, when two Mexican police officials were airlifted to the border and driven across. Beyond those cases, 43 additional patients wounded in Juárez have been treated at Thomason this year, including a 1-year-old girl who was pinned against a wall by a truck involved in a drug-related shooting. All the patients have been dual citizens of Mexico and the United States or have had the proper documentation to enter the country, says a Thomason spokeswoman. Yet legal issues are beside the point for many El Pasoans. A recent posting in an online forum on border violence summed up the fear of many: "It is only a matter of time before the Mexican drug dealers send assassination squads over to Thomason hospital." The traffickers already occasionally kidnap Mexicans who have fled north to escape threats of violence in Juárez.

The border between El Paso (population: 600,000) and Juárez (population: 1.5 million) is the most menacing spot along America's southern underbelly. On one side is the second-safest city of its size in the United States (after Honolulu), with only 15 murders so far in 2008. On the other is a slaughterhouse ruled by drug lords where the death toll this year is more than 1,300 and counting. "I don't think the average American has any idea of what's going on immediately south of our border," says Kevin Kozak, acting special agent in charge of the Immigration and Customs Enforcement's office of investigations in El Paso. "It's almost beyond belief." Juárez looks a lot like a failed state, with no government entity capable of imposing order and a profusion of powerful organizations that kill and plunder at will. It's as if the United States faced another lawless Waziristan—except this one happens to be right at the nation's doorstep.

The drug war in Juárez escalated dramatically at the start of the year when the Sinaloa cartel—which originated in the Pacific state of the same name—began trying to muscle in on the Juárez cartel's turf. The focus of the fight, which has also drawn in the formidable Gulf cartel, is the city's prized "plaza," or drug-smuggling corridor. Mexican President Felipe Calderón responded to the turmoil by dispatching 3,000 balaclava-clad soldiers and federal police to the state of Chihuahua, where Juárez is located, earlier this year. Yet the narcotraffickers, with their vast arsenal of high-powered weaponry, haven't shied from taking them on. (Or trying to buy them off: the cartels have infiltrated virtually every law-enforcement institution in the country, from local police departments to the Mexican attorney general's office.) The result has been an orgy of violence, growing more public and more spectacular by the day. Beheadings, burnings, dismemberments and mutilations have become routine.

On a recent weekday night, reports of yet another execution in Juárez crackled over a police scanner. Two brothers had been shot in a squatter neighborhood called Mexico 68. At the crime scene, one of them lay dead on the sidewalk, his red T shirt pulled up to expose a chest riddled with 9mm bullets. The other, who had barely survived, was evacuated by ambulance. A group of teenage girls straining against the yellow police tape recounted what they'd seen. A silver GMC Yukon SUV roared up to the victims' home, one of the rear tinted windows was lowered and a gunman emptied his pistol. "It was the Aztecas," one of the girls whispered, referring to the Barrio Azteca gang, which got its start in El Paso and is reportedly allied with the Juárez cartel. The group "controls and terrifies" the neighborhood in its battle against affiliates of the Sinaloa cartel, the girl said. "Shhh!" one of her friends cautioned. "It's the truth," said the girl, who requested anonymity for safety reasons.

The cartels operate largely with impunity. Police who defy them are eliminated, as in the case of Oscar Campoya, a municipal cop who was shot dead by assassins in March as he left a local precinct. Despite the presence of several witnesses, including fellow officers, there have been no arrests (only 2 percent of violent murders in Mexico are solved, according to government figures). Mario Campoya, the victim's brother, says Oscar had been pressured relentlessly by other members of the force to cooperate with the drug gangs, but had refused.

To try to remedy things, Juárez Mayor José Reyes demanded that the city's police department clean house earlier this year. More than 400 cops have been dismissed, and every officer must now undergo drug tests and background checks. "Corruption is so strong within the force, there are so many inside deals, that the criminals hardly worry about getting caught," says Reyes. "I realize that firing cops and turning them out on the street is dangerous, but it's worse to have them within the police force." Next on his agenda: to acquire better equipment for law enforcement and redouble enlistment efforts. Large billboards around the city feature a black-masked, machine-gun-toting officer along with a boldface message: JUÁREZ NEEDS YOU!

YET authorities face a ruthless enemy. Cartel capos have made clear they'll go to whatever length necessary to eliminate opponents. In early November, armed men stormed a Red Cross operating room in Juárez, ordered the doctors and nurses performing surgery on a 25-year-old gunshot victim to leave and then killed him. Oscar Varela, head of the city's Hospital General, says high-risk patients are now treated in a restricted, bulletproof area guarded by cops.

Violence has long plagued Juárez. This, after all, is the city where hundreds of women were mysteriously murdered in the 1990s. But recently the bloodshed has taken on an anarchic quality. The absence of authority has opened the way for hordes of criminal gangs—some of them offshoots of the cartels; others, bands of opportunistic street thugs—to carve out specific rackets, like kidnapping, human trafficking and car theft (more than 1,500 vehicles were reported stolen in October alone). Another burgeoning activity is extortion. Business owners are ordered to pay as much as $2,000 per month in protection money; if they refuse, their establishments are torched with Molotov cocktails. That happens regularly; the city is dotted with shuttered restaurants and clubs still blackened with soot. Juárez "is a lawless territory," says Sergio González, a Mexico City-based expert on the border region. "And I'm afraid it might only get worse."

That prospect stokes alarm among many residents in El Paso because of the city's close bond with Juárez. The two places are deeply interwoven by culture, trade and geography. Stand atop a hill on either side of the border, and the urban tapestry below unfolds like a single metropolis with a barely visible divide at the river. Many area residents hold dual citizenship and have relatives in both countries. Each day, 200,000 people cross the Rio Grande along one of five bridges connecting the two cities. Executives of the Mexican maquiladoras (factories) who live in El Paso head south, while juarenses shopping for sneakers and stereos head north. Mexican nationals spend about $2.2 billion per year in El Paso, and before the bloodbath began, Americans fueled a vibrant tourism economy in Juárez.

Then there are the illicit links. Going back to Prohibition, Juárez has helped sate the ravenous American appetite for contraband. These days, the West Texas corridor is a key shipping and distribution center for drugs destined for various markets across the United States. According to a recent report by the Justice Department's National Drug Intelligence Center (NDIC), 6 cartels, 129 midlevel organizations and 606 local groups engage in drug-trafficking activities in the binational region. As part of an elaborate, highly compartmentalized operation, some outfits specialize in transportation, others in enforcement and still others in retail sales. Guided by spotters on the Mexican side equipped with binoculars and cell phones, many shipments cross the bridges into El Paso alongside legitimate commerce. Once in the city, the goods are deposited in stash houses before being sent elsewhere.

Given the permeability of the border, it's not hard to imagine violence seeping over as well. American officials insist that's highly unlikely. The cartels "cannot operate here with impunity," says ICE's Kozak. "One reason we don't see that type of violence here is that it would never be tolerated." El Paso is crawling with federal law-enforcement agents—including representatives of ICE, the FBI, Customs and Border Protection and the Drug Enforcement Administration—and all are monitoring events to the south like hawks. An ICE-led, multiagency Border Enforcement Security Task Force that launched in El Paso in 2006 and specializes in criminal organizations has arrested more than 1,500 individuals and seized six tons of narcotics as well as countless weapons. Tangling with American authorities, says Kozak, "is not good for [the cartels'] business."

True enough, but the United States is less insulated than some might think. According to the NDIC report, the increased bloodshed in Juárez "could spill into the [West Texas] region," since it raises the threat that drug-trafficking organizations will "confront law-enforcement officers in the United States who seek to disrupt these DTOs' smuggling operations." (The report cites several armed encounters that took place on the American side in 2006.) The cartels' tentacles already reach deep into El Paso. Local banks are full of drug money, says Claudio Morales, who heads special operations at the El Paso County Sheriff's Office. "We're one of the poorest regions along the border, yet El Paso has some of the largest cash transactions" in the country. Many cartel henchmen are known to have moved their families to the Texas city to insulate them from the carnage back home—though that still leaves the families vulnerable to kidnappers. Kids whose relatives have been killed in the violence are showing up at the Children's Grief Center of El Paso. "We have a lot of kids that are really traumatized," says executive director Laura Olague. "There's a lot of secrecy, or fear, that whoever killed their parents or loved ones would come look for them."

Authorities, too, worry that narco leaders could order hits on city residents. "We've had that type of intel," says Kozak. Among the prime targets could be Mexican cops, who are fleeing the violence in greater numbers and seeking political asylum in the United States (such requests are rarely granted, since the laws are aimed at victims of state-sponsored persecution). For now, drug organizations prefer to abduct their quarry in the United States and spirit them across the border before harming or killing them. Kozak says that in the past year, a half-dozen kidnappings tied to narcotraffickers have taken place in El Paso. One of them involved Miguel Rueda, a convicted smuggler who failed to pay a drug debt. According to a criminal complaint filed in U.S. district court, Rueda was told to meet a former accomplice, Ricardo Calleros-Godinez, at a gas station in El Paso in February. After picking up Rueda, Calleros-Godinez allegedly pulled a gun on him, duct-taped his eyes, mouth, hands and legs, and drove him to a house in Juárez. Four or five days later, Rueda reportedly settled the debt through a transfer of family land and was freed. (He's now in Texas state prison serving a sentence on cocaine charges.)

The criminal group that perhaps best illustrates the porousness of the border is the Barrio Azteca gang. Founded in the 1980s in state prison in El Paso, the organization now counts thousands of members in Mexico and the United States and is believed to be affiliated with the Juárez cartel. Authorities say the gang has a penchant for brutality and engages in everything from extortion to trafficking to assassination. The Barrio Aztecas are "the wild card in all this," says Samuel Camargo, a supervisory special agent with the FBI in El Paso. "That probably has the most potential for violence here"—and it's an American creation. In January, the U.S. Attorney's Office brought racketeering charges against more than a dozen of the gang's members, and a trial began in early November.

All the talk of bloodletting has made El Pasoans warier than ever of their southern neighbors. Amity has given way to division. The turn of events anguishes Veronica Escobar, an El Paso County commissioner. Her office window overlooks Juárez, where she used to buy Christmas presents as a child and where, until this year, she used to celebrate her birthday. "I feel so sad that our sister city is struggling through this period in their history that's horrific." Just a few miles across the river in Juárez, a carpenter named Francisco (who wouldn't give his last name) lives on a hill from which he can see the lights of downtown El Paso twinkle at night. He yearns to take his children north one day. "I've had enough of this," he says. "Enough with these gangs and their ruthless rats." Residents on both sides of the border share his disgust—and his dread that the violence will never let up.