Jun.17, 2010, 12:29 a.m., Source: The Associated Press

Mexico announced some of the toughest restrictions in its history on dollar cash transactions Tuesday to fight money laundering that is fueling an increasingly bloody drug war.

Tourists and Mexicans without bank accounts will be limited to exchanging a maximum of $1,500 per month, Finance Secretary Ernesto Cordero said. The measure is meant to help stem the flood of about $10 billion per year in suspicious cash flows possibly linked to drug trafficking.

The billions have bought the heavy weaponry that drug gangs are using in attacks on police, such as an ambush Monday in the western state of Michoacan that killed 12 officers. If such sophisticated, mass attacks continue, June is on track to be one of the bloodiest months since President Felipe Calderon launched an anti-drug offensive shortly after taking office in late 2006.

Federal police anti-drug chief Ramon Pequeno blamed the attack on the Michoacan-based La Familia drug cartel, which has become notorious for bold assaults on federal security forces. Police described it as a planned ambush in which cartel gunmen blocked a road with a bus and opened fire with assault rifles.

Also Monday, gunmen killed three federal officers in the northern city of Chihuahua, and inmates at a prison in northern Signal state used guns apparently smuggled inside to shoot to death 21 other prisoners, in what officials said appeared to be an inter-gang dispute. At least eight other inmates were later stabbed to death in apparent reprisal attacks at the same prison.

The dozens of deaths on Monday followed a particularly bloody pair of weeks. Last week, armed commandos killed 16 people in one day in the northern city of Ciudad Madero, and gunmen burst into a drug rehab center in Chihuahua and shot to death 19 men.

Mexican officials have attributed much of the violence _ over 22,700 people deaths in drug-related violence since late 2006 _ to turf battles between drug cartels. But the cartels are also increasingly turning to attacks on police and prosecutors.

On Tuesday, police vowed to fight back, with Pequeno saying federal forces were confident they would catch the cartel gunmen responsible for the ambush and detain their chiefs.

"The main objective now is to arrest the leaders of the criminal organizations," he said at a news conference announcing the detention of a top aide to U.S.-born drug capo Edgar Valdez Villarreal, alias "La Barbie," and six alleged henchmen.

The influx of suspect U.S. dollars has also contaminated legitimate Mexican businesses, according to the banking industry.

"The problem is in the formal, legal economy, where we have seen an unusual increase in transactions carried out in dollars," Luis Robles, the vice president of the Mexican Association of Banks, told a news conference. In recent years, banks have seen an excess of about $10 billion in dollar deposits and transactions that cannot be explained by normal business activity.

"This excess is going to decrease substantially ... by limiting the way in which dollars were used so freely in the economy," Robles said. Previously there was no such limit and it was possible to buy high-ticket items like cars and houses in cash dollars.

The bank association said tourists would not be inconvenienced by the measure because most use debit or credit cards for most purchases. Businesses on the border or at tourist destinations would be limited to exchanging a maximum of $7,000 per month. And Mexicans working abroad now use electronic transfers for 96 percent of the remittances they send home. There would be no restrictions on people using pesos to buy dollars.

The last time Mexico imposed strict restrictions on dollars was during the 1982 financial crisis, when it imposed exchange rates, transaction restrictions and froze some dollar accounts.

Cordero, the finance secretary, said Mexico plans other initiatives for the future, such as making it harder to use cash in large transactions even in pesos.

"Measures will be put in place to restrict and regulate many of the sales transactions that are carried out, not just in dollars but also in pesos, for things like real estate," Cordero said. "This is a very important step."