MONTERREY, Mexico (Reuters) - Security forces found the body of a slain mayor on Wednesday near Mexico’s richest city, days after he was abducted by hitmen in the latest attack on a public official from increasingly bold drug cartels.

Soldiers patrol the site where the body of Edelmiro Cavazos, mayor of the tourist town of Santiago, was found on a local road in the municipality of Santiago, some 30 km (18.6 miles) away from Monterrey, August 18, 2010. REUTERS/Tomas Bravo

President Felipe Calderon, who has staked his presidency on a faltering drug war, condemned the “cowardly assassination” of Edelmiro Cavazos, the mayor of a town on the outskirts of Monterrey, an industrial center with close U.S. business ties.

“The murder of Edelmiro is an outrage and forces us to redouble our efforts to fight these cowardly criminals,” Calderon wrote in a Twitter update.

Cavazos, a 38-year-old, U.S.-educated mayor from Calderon’s conservative National Action Party, was found dumped on a rural road early on Wednesday outside his town of Santiago. He was blindfolded and his hands were tied.

Heavily armed soldiers swarmed the crime scene while frightened residents of the popular colonial tourist town stayed indoors, leaving normally busy streets deserted.

The attorney general in the border state of Nuevo Leon, which includes Santiago and Monterrey, which is 140 miles from Texas, confirmed the body discovered was Cavazos’ and said drug cartels were behind the killing.

Nuevo Leon Governor Rodrigo Medina urged Calderon to send more troops to Monterrey and surrounding areas, echoing a plea published on Wednesday from Mexican business groups in a full-page statement in local newspapers.

Medina said this week that Cavazos, who took office last year, was probably targeted for his efforts to clean up Santiago’s corrupt police force, part of a nationwide effort to curb endemic police graft. The mayor of the San Pedro Garza Garcia municipality, part of Monterrey, said drug gangs threatened Cavazos directly late last year.

“When the mayor took office, he told me that criminal groups had gone to see him, saying: either you join us or we eliminate you,” Mayor Mauricio Fernandez told local radio.

Santiago, a popular weekend getaway for Monterrey residents, has also become a staging post for drug gangs smuggling narcotics north into the United States. Many capos have taken refuge in mansions nestled in surrounding hills.

More than 28,000 people, mainly drug traffickers and police, have been killed in Mexico’s drug war since December 2006, intensifying worries in Washington about the stability of the United States’ oil-producing neighbor.

Interior Minister Francisco Blake was due in Monterrey later in the day to discuss the killing with local leaders.

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INVESTMENT ON HOLD

The death of Cavazos, a father of three who was taken from his home on Sunday night, is the first attack on a public official by suspected cartels in Nuevo Leon, a manufacturing hub once seen as a model for other developing nations.

Drug violence has surged in Monterrey, where per capita income is double Mexico’s average, since a dispute between the powerful Gulf cartel and the Zetas, a brutal spinoff group, turned into all-out war since the start of this year.

That turf war is also terrorizing neighboring Tamaulipas state, where hitmen killed a candidate for governor in June, the highest level political killing in Mexico in 16 years.

Violence in Nuevo Leon is still well below the dramatic levels of border cities like Ciudad Juarez, but the violence in Monterrey is a challenge for Calderon as foreign companies begin to question the safety of doing business in Latin America’s second-largest economy.

“Insecurity in Monterrey is now spinning out of control and is a clear threat to investment. The city is losing its leadership,” said political analyst Jose Luis Garcia at the University of Monterrey. “Politicians ... aren’t prepared to pay the price and confront the problems.”

Local business leader Juan Ernesto Sandoval warned this week that a nascent economic recovery in Nuevo Leon, after Mexico’s punishing downturn last year, was under threat.

“There are investment projects that are being frozen,” he said, pointing to a decision from one retail chain to put construction of stores and creation of 1,000 new jobs in Monterrey on hold.