A two-hour gun battle which began at 7 p.m. local time between the Mexican Army and drug hitmen ended in 18 fatalities at the Mexican holiday resort of Acapulco on Saturday.
Two soldiers and 16 gunmen were killed in the battle. The army was dispatched to follow up on an anonymous tip and were met by drug hitmen lobbing hand grenades and firing AK-47 type rifles.
"There were grenade and rocket explosions, and weapons like AK-47s. The fight lasted almost two hours," said an observer.
Reinforcements who attempted to join the gunmen in the house were killed by army personnel.
Gunmen attempting to flee from the gun battle were prevented doing so by a military Hummer.
Following the battle, the army seized a huge arsenal of 36 large caliber rifles, 13 small-caliber shotguns, two grenade launchers, 13 hand grenades, 3,525 rounds of ammunition, 180 magazine charges and eight vehicles.
Five people were placed under arrest. Between three and nine soldiers were injured along with three bystanders. 22 people were evacuated from the area following the battle including tourists, a family, the elderly, and a pregnant woman.
Four Guerrero state police were found in the garage of the property who claim they had been kidnapped and held hostage. A colonel reported anonymously that their account was not confirmed.
Local media reported that the gunmen were a part of the Beltran Leyva drug-trafficking gang who belong to the Sinaloa Cartel.
Drug related violence has damaged tourism to the beach front resort city as well as economic investment in the area.  The recent H1N1 flu virus outbreak in Mexico which caused 89 deaths, the wearing of masks, school closures and an airport quarantine cost billions of dollars in lost tourism dollars at the end of April.
Tourism destinations are offering discounted hotel rates to entice visiting tourists. Hotel Los Flamingos once owned by John Wayne and Tarzan's (Johnny Weissmuller) former home were neighboring tourism sites in the neighborhood of Saturday's gun battle.
Acapulco, population over 600,000 is a city of the state of Guerrero on the Pacific coast of Mexico, 300 miles (483 km) southwest from Mexico City. Guerrero provides a main route for drug smugglers between South America and the United States.
Mexico's president, Felipe Calderon, along with American President, Barack Obama, have initiated a crack down on drug gangs. Rival drug gang violence in Mexico has resulted in 2,300 fatalities in the first five months of this year.

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Tourists evacuated following shootout between Mexican army and drug hitmen