They were Mexico's drug lords, who control most of the drugs smuggled to the
                  United States, along with their bodyguards, various associates and their contacts
                  in government.

                  Sixty men in all, they gathered in a restaurant, drawing the notice of local people
                  as well as police in nearby Monterrey.

                  A participant in the three-day meeting, as well as associates of the smugglers,
                  government officials and others familiar with the drug trade, gave independent
                  accounts of the summit, speaking on condition of anonymity. Their descriptions
                  differed slightly in detail but agreed on what the central purpose of the meeting
                  was: to join forces after 12 years of bloody turf wars and form a new cartel that
                  would unite operations and cut costs.

                  The alliance has been in the works for three years, but was made more urgent by
                  a tough line from Mexico's new president, Vicente Fox; by a court decision
                  making it easier to extradite drug smugglers to the United States; and by a
                  proposed U.S.-Mexican crackdown on money-laundering, according to
                  government insiders as well as associates of the smugglers.

                  A multibillion-dollar industry

                  Although nobody has a good estimate of how much money Mexico makes from
                  drug smuggling, the White House estimates that about half of the $65 billion in
                  drugs that Americans buy each year come through Mexico. By any estimate drug
                  trafficking is one of Mexico's top sources of income, rivaling the top legal
                  industries of oil, tourism and assembly-for-export plants.

                  The industry is so pervasive that it has corrupted law enforcement from top to
                  bottom. Police assigned to drug duty are routinely arrested for collaborating with
                  the smugglers, and in 1996 Mexico's newly appointed drug czar was found to be
                  on the payroll of Carrillo Fuentes. Former Gen. Jesus Gutierrez Rebollo remains
                  in jail.

                  The last major drug cartel in Mexico collapsed in 1989 when its longtime boss,
                  Miguel Angel Felix Gallardo, was arrested. The new alliance would end the war
                  of succession that has killed hundreds of people, and mean a major shift in the
                  drug trade in the Western Hemisphere, creating a syndicate better equipped to
                  evade law enforcement.

                  Rafael Macedo de la Concha, Fox's new attorney general, said his agents
                  investigated tips about such a meeting and found no evidence that it had
                  occurred. The U.S. Drug Enforcement Administration refused comment.

                  But the sources said the meeting took place January 26-28 around a long wooden
                  table in a restaurant's back room, a picture window offering a garden view.
                  Screened off from the main dining area, they talked as waiters in tuxedos served
                  steaks, roast goat and dried beef soup, a regional specialty.

                  A who's who of smugglers

                  According to the accounts, the guest list at the January meeting read like a who's
                  who of Mexican drug smugglers:

                  -- Juan Esparragosa Moreno, who Mexican authorities say is a veteran drug boss
                  known as "El Azul" for his dark, almost blue-toned skin; other heirs of the late
                  Amado Carrillo Fuentes, aka "the Lord of the Skies," including Ramon Alcides
                  Magana, a former policeman known as "El Metro," who authorities say saved the
                  life of Carrillo Fuentes' son and became a close confidant. They represented the
                  Juarez drug-smuggling organization, which operates along Mexico's Caribbean
                  coast, central Mexico and the west Texas border.

                  -- Humberto Garcia Abrego, accused by Mexican authorities of running the Gulf
                  drug gang of his brother Juan, who is serving 11 life sentences in a U.S. prison
                  for drug smuggling. The Gulf gang operates along Mexico's Gulf of Mexico
                  coast. Accompanying him was Jaime Gonzalez, who associates say slipped out
                  of the maximum-security Almoloya prison to attend the meeting.

                  -- Ignacio "Nacho" Coronel, reputed leader of the Colima gang, which operates
                  in the Pacific coast state of Colima and along the far eastern border with Texas.

                  -- Ismael "El Mayo" Zambada, wanted by Mexican authorities, and
                  representatives of Joaquin "El Chapo" Guzman, who recently escaped from a
                  Mexican maximum-security prison in a laundry bin. The two men work in a
                  semi-independent but coordinated manner along Mexico's Pacific coast and north
                  to the Arizona border.

                  -- Gilberto Valdes, a businessman who sources said represents smugglers in the
                  southern state of Chiapas.

                  -- Two men in military uniforms with generals' stars, to whom the others
                  referred as "representatives of the attorney general's office," the participant and
                  associates said. And, they said, a group of Colombians was present as
                  consultants.

                  These five major drug-smuggling groups make up a new cartel, not yet named,
                  which encompasses many smaller gangs, the sources said. The only major group
                  to decline the invitation to the meeting was that of the Tijuana-based Arellano
                  Felix brothers, who run the bloodiest organization, all the sources said.

                  Analysts who study the drug trade confirmed an apparent alliance, although they
                  didn't know about the meeting.

                  Macedo, the attorney general, said his office asked nearby residents about any
                  unusual movements at the time but was told nobody had seen anything strange.
                  "It's all speculation," he said.

                  However, Eduardo Valle, a former drug official at the attorney general's office,
                  said colleagues told him there was "a lot of movement" in the agency's office in
                  Monterrey, just a few miles from Apodaca, at the time of the meeting. He said he
                  didn't know why, but added: "Certainly something major was happening."

                  Union a 'normal process'

                  A prominent drug expert, Jorge Chabat of Mexico City's Center for Investigation
                  of Economic Development, said there are signs of a new union, and that
                  although he hadn't heard about the meeting, he thought it was plausible.

                  "This seems like a normal process to me. This occurs in all legal businesses and
                  there's no reason it shouldn't in the illegal ones, too," he said.

                  Apodaca is a busy industrial suburb of Monterrey and a prime operations center
                  for all Mexican drug smugglers because businessmen can meet there without
                  attracting attention and neighbors can be relied on to keep silent.

                  The associates said the smugglers opened their books to one another, discussed
                  how much each paid in bribes, and shared contacts, informants and the names
                  of corrupt officials. According to the insiders, the participants agreed that
                  members of the new cartel would -- for now at least -- respect each other's
                  territory.

                  The smugglers agreed to devise a joint strategy for selling drugs within Mexico
                  and exporting them to the United States, the sources said.

                  They decided to pool their bribes in one larger payment to each corrupt official,
                  and the generals agreed to accept the new form of payment, the sources said.

                  Also, they said, the traffickers agreed to more meetings to strengthen their new
                  cartel.

                  According to all but one of the sources, the smugglers also agreed to end their
                  infighting. But one source close to the government said he understood they had
                  agreed to increase violence in an effort to destabilize the Mexican government.

                  Copyright 2001 The Associated Press.