Mexico City - Suspected drug traffickers trapped in a safe house fought a furious gun battle with Mexican soldiers early Sunday in the beach resort city of Acapulco. As terrified residents and tourists cowered in their rooms, the firefight raged for two hours, leaving 16 gunmen dead. Two soldiers were also killed and several bystanders were wounded.

    The gunmen, suspected members of one of Mexico's major cartels, threw as many as 50 grenades at the advancing soldiers, and both sides fired thousands of rounds from assault rifles.

    After the battle ended, soldiers found at the house nearly 50 guns, two grenade launchers, 3,500 rounds of ammunition, luxury cars - and four bound and gagged state police officers who said they had been kidnapped earlier.

    The shootout took place in a crowded hotel zone called Peninsula de las Playas, where Hollywood stars frolicked in the 1950s at "Tarzan" actor Johnny Weissmuller's nearby Hotel Los Flamingos. The area has faded from its former glitz but is still popular with budget-minded Mexican and American tourists.

    The battle between 200 army soldiers and a cartel enforcer gang in the middle of a Mexican resort may deal another blow against the country's tourist industry, which is reeling from fears generated by the outbreak of swine flu in April. Tourism in Mexico has been in a slump since spring, when a State Department travel advisory warned about the dangers of Mexico's ongoing drug war, which has left more than 2,300 dead this year.

    Mexican President Felipe Calderón and his tourism ministry have promised to spend $90 million to woo American tourists back to the country's sandy beaches and colonial cities, and have launched an advertising campaign that features pro golfer Lorena Ochoa and opera star Plácido Domingo, a Spaniard. Tourism is Mexico's third-leading source of legal foreign revenue.

    Statements issued Sunday by the Mexican defense secretary said an anonymous tip alerted soldiers to the gunmen inside a large, gated house in the hotel zone. They did not name the cartel to which the gunmen belonged, though Mexican news outlets said they were suspected members of the Beltran Leyva drug gang.

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    That group maintains a strong presence in Acapulco, which some Mexican newspaper columnists have taken to calling "Narcopulco."

    An army colonel who took reporters for a tour of the scene said that his soldiers found four Guerrero state police officers in the garage of the house. The army did not know the police officers were inside when they stormed the house, he said.

    "We found them like this, handcuffed, and they say they were kidnapped. So if they were kidnapped, as they say, then we rescued them," the colonel said, according to the Associated Press.

    Some men inside the house tried to escape during the battle, but they were stopped when they slammed their car into a military vehicle blocking the gate. Another group of people attempted to reach the house to reinforce the gang inside, but they were killed, according to the colonel.

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