The events which have no name scythe through the valley like invisible reapers. They slice east to west, west to east, a homicidal pendulum. No one sees anything.

The pair of human heads left in a coolbox on the corner of the plaza? A mystery. The 18 houses burnt in a single night? An enigma. The doctor and his family who disappeared? A rumour.

This much residents do tell you: Juárez valley stretches along the Rio Bravo and used to grow cotton. It roasts by day, shivers by night. Lob a stone over the river and it lands in Texas.

Beyond that, conversation tends to dry up. Of the slaughter, of the reason this has become one of the deadliest places on the planet, residents have little to say. At most they refer to "the situation", "the things happening" or, simply, "it".

Manuel Robles, curator of the valley museum in the hamlet of San Agustín, can talk about dinosaur fossils and Apaches but not unfolding history. Pressed, he rubs rheumy eyes, gazes out the window and falls silent. Finally he says: "If I tell you, tomorrow I won't be here. They'll kill me."

It's as close as you get to an acknowledgment that this valley of a dozen villages and towns, once home to 20,000 people, has detached from Mexico and entered a realm beyond any map. There is no state here, no rule of law. There are killings and beheadings and burnings and no one sees anything.

The official explanation is that the Sinaloa cartel is challenging the homegrown Juárez cartel for a venerable gun and drug trafficking route to the United States. Just as Billy the Kid coveted this trail, so do modern outlaws.

It is perhaps the loneliest corner of what is termed Mexico's drug war. More than 500 people are estimated to have died here in the past four years, a per capita toll far worse than Iraq or Afghanistan. Nationwide 28,000 have died.

As violence raked up and down the valley, exterminating entire families, an exodus began. By the time a church was torched and anonymous notes warned of an imminent bloodbath most were gone, leaving blackened, boarded-up ghost towns. Nature, at least, is thriving: weeds festoon carcasses of abandoned pick-up trucks.

The cemetery outside Guadalupe, the biggest town, is a scorched, desolate place with fresh mounds. "Four in the past week, all young ones," says Ignacio Montes, 66, the gravedigger. A cloth hangs from his baseball cap.

He indicates a family plot: Omar Amaya, mayor, killed in 2006, aged 33; his father, Apolonio, also mayor, killed in 2007, aged 59; Omar's sister Aglae, aged 29, and mother, Maria, aged 57, both killed in 2008.

"They go after the relatives, you see," says Montes. During a burial in 2008 gunmen ambushed mourners, killing the dead man's daughter and wounding his granddaughter. "It doesn't stop," says Montes. He recently found a 16-year-old boy's battered body dumped on a grave.

Victor Luque, 53, is the acting mayor of Guadalupe. His predecessor was assassinated two months ago, the town's fourth murdered mayor. Urbane, courteous and elegant in a white guayabera, Luque agrees to an interview.

What is going on in the valley? "I really don't know." Who is doing the killing? "I really don't know." Who is responsible for security? "I really don't know." How many people have fled? "I really don't know." The mantra almost becomes a joke. The mayor shrugs, smiles. He knows this exchange is ridiculous. He floats a metaphor. The "situation", he says, is "a perfect storm". There is a local expression: "Hasta el viento tiene miedo". Even the wind is afraid. In this town hall, with its black ribbons, bleached peach paintwork and near-empty offices, terror is in the heavy stillness.

Momentarily dropping the charade, Luque mentions he has no bodyguard. "What would be the point? If they decide to kill you then there would be two bodies instead of one." Who would "they" be? The mayor smiles again. "I really don't know."

But someone knows a lot about the valley. During the Guardian's tour there was barely another vehicle or soul in sight. Yet the next day the guide's family received an anonymous phone call detailing our entire itinerary – who we met, what we discussed, even places where we slowed but did not stop – with precision.

Mexico's agony is ritually explained as a turf war between drug cartels. Group A versus Group B versus Group C. A savage conflict, but the mayhem, according to authorities, is a sign of cartels' desperation. Slowly but surely the state is prevailing thanks to brave soldiers and police. "My government is absolutely determined to continue fighting against criminality without quarter until we put a stop to this common enemy and obtain the Mexico we want," President Felipe Calderón, who declared war against cartels in 2006, said in recent newspaper advertisements.

Juárez valley suggests otherwise. It is proof of profound failure, says Gustavo de la Rosa, the state human rights commissioner. "It is abandoned, a land without law." One reason, he says, is a lack of political will. "There are few votes there so politicians ignore it. The place has gone back to the 1880s."

In fact the state is present in the form of the army, which has cameras and checkpoints with sandbags on the only road in and out. The soldiers' presence, however, prompts the question: why did they watch thousands of residents flee – convoys of furniture-packed trucks – and do nothing. "What's the point of them?" says José Sereseres, 84, a lone soul in a cowboy hat on the main street of Caseta village.

If there is a pattern to the slaughter it is that Sinaloa is exterminating suspected Juárez cartel members and their relatives. Rocio Gallegas, an editor at Juárez's main newspaper, El Diario, says the security forces must have intelligence about what is happening. "It's not possible that they don't know."

Authorities did catch José Rudolfo Escajeda, the Juárez cartel's valley enforcer, but a Sinaloa commander, nicknamed Quitapuercos – pig killer – is believed to remain free. It suggests, say some, that the army is tacitly backing Sinaloa.

A similar pattern emerges in Juárez city. On the surface things looks normal. Shops and schools are open, there is rush-hour traffic and fast-food restaurants are packed at lunchtime. The scythe, however, is busy. More than 6,000 have been murdered since 2008, a shocking total for a city of just 1.3 million. Last month was the bloodiest yet: 363 dead, according to El Diario's count.

It is less immediately obvious than in the valley, but the city is ebbing away. Many offices and houses are empty and have "for sale" signs outside. About 10,670 businesses – 40% of the total – have shut. A study by the city's university found that 116,000 houses have been abandoned and 230,000 people have left.

Juárez is the main gateway between Mexico and the US. Railways and roads converge here, as do smugglers. "Poor Mexico, so far from God, so close to the United States," the dictator Porfirio Diaz observed in the 19th century. With the US the world's biggest market for illegal drugs the quip still holds.

Just as in the valley, security forces in the city are an oxymoron. Their absence breeds insecurity, their presence breeds insecurity. They prey on the population, kidnapping and extorting in cahoots with criminal gangs, according to multiple complaints filed to the human rights commission. In an opinion poll published last week 39% of people cited official corruption as the main driver of violence. Narco-trafficking – despite government claims and media echoes – was cited by a mere 14.6%.

It is a disturbing finding. Here in the broiling desert heat the boundary between warring criminal groups and the state, a comforting delineation within the drug war, blurs and shimmers. Soldiers and police – and elected officials – fight with, as well as against criminal gangs. "Our security forces are infiltrated and there are links between criminal groups and certain politicians," says De La Rosa, the human rights commissioner. "The way they work is to strengthen each other and the phenomenon is getting worse. There are some politicians who flaunt their connections."

A large man with a rumpled shirt, snowy beard and hair pulled into a ponytail, the commissioner resembles a hippy Santa Claus but is a tough, shrewd operator. He investigates human rights abuses with a small team of young assistants; one of the few state agencies credited with working as it should.

For protection De La Rosa sleeps across the border in El Paso and travels to Juárez every day with 12 bodyguards. In between fielding phone calls on the latest atrocities and rumours he coaxes testimony from frightened families.

He is an outspoken critic of a government strategy that, he says, allows crooked politicians and financiers to go free. "There are untouchables."

When thousands of army troops deployed in 2008 the violence briefly abated. A well-placed source from city hall, a sophisticated, cultured man, smiles at the memory. "It was a cleaning. And it worked." What he means is death squads took out mid-ranking narcos, including crooked police.

The campaign has never been officially admitted. "But the cleaning stopped after a few months," rued the official. "That was a mistake." The authorities did not anticipate how quickly criminal gangs would rebound and co-opt security forces, he said.

Police have replaced the army on the streets. They are seen as ineffectual at best, predatory and murderous at worst. Business owners who spoke on condition of anonymity accused officers of treating the city as booty. "If you don't pay, you risk disappearing, that's the game," said one car showroom manager.

Despite shake-ups, municipal and state police are still regarded as loyal to the homegrown cartel, a tradition going back decades. Federal police, outsiders brought in for the drug war, have become linked with the Sinaloa interlopers. Last month 250 officers roughed up and arrested their own commanders, accusing them of siding with narco-traffickers. A mutiny of the honest, say optimists; a row over "cuota", the levy the force charges on civilians, say others.

Arrest statistics fuel suspicions of favouritism. Of 81,128 drug-related arrests until the end of July some 24% were from Sinaloa, the oldest and mightiest cartel. The motive, apart from pay-offs, supposedly would be to end turf wars by promoting one cartel's hegemony. Calderon indignantly denies favouritism, but the nature of violence in Juárez suggests local commanders – with or without approval from Mexico City – have cut deals with Sinaloa.

The Juárez cartel, fearing extinction, has lashed back at the black-uniformed "federales" who allegedly back their rivals. An urban guerrilla onslaught has killed about 40 officers since April. The campaign includes drive-by shootings, kidnappings, car bombs – and a surreal request to the FBI to investigate their Mexican counterparts.

On a particularly hot morning last week a patch of asphalt on Bulevar Ampliacion Cuatro Siglos revealed a new cartel tactic: it started with a bloodied, naked foot, continued with chunks of leg, then a trunk, then arms, hands and finally, 200 metres further, a head on the bonnet of a black Nissan. The quartered remains of federal police officer Hector Mendoza Guevara, aged 25. There was a placard: "This is what happens to those who help Chapo." Joaquin "El Chapo" Guzman is the boss of Sinaloa.

Any police force would be shaken by the sight, but the grisly tableau's arrangement seemed designed to instill terror in young officers from parts of southern Mexico where superstition and belief in sorcery are common. Those at the scene were ashen. "Get away! Fuck off!" one screamed at onlookers.

In Juárez good news passes for this: the federales are so busy trying to stay alive that they recently suspended their extortion rackets, according to business owners. The force spokesman declined interview requests for this article.

With killings averaging about a dozen a day, and businesses fleeing, the city edges ever closer to the Hobbesian dystopia of the valley 50 miles east. Each day brings fresh horrors. Two men stabbed and left to die face-down in a dump. Six people incinerated in a van. Two cyclists gunned down on the street. A child shot on the family porch. That was just one day. Before lunch.

"It amuses me when various experts in the US or Mexican government, or in the media, try to explain what's going on," said Charles Bowden, a veteran chronicler of the border and author of Murder City: Ciudad Juárez and the Global Economy's New Killing Fields. "The thing about Juárez is you can't see a pattern to the violence anymore. Killings are everywhere. They cross all class lines. You can't make sense of it."

There are an estimated 500 gangs in the city, many drawn from slums where parents work in sweatshop factories that pay $40 (£26) a week. Some gangs are independent, some work for the cartels, some work for the police and some have no idea whom they work for. They just take orders over the phone from unknown bosses.

Few murders are investigated let alone solved. Even when suspects are arrested and paraded before TV cameras they are, according to numerous media investigations, often freed days later for want of evidence, prison space or judicial will. "It's like a war in which no one remembers how it started. No one controls the killing now, it's got a life of its own," said Bowden.

Unable to staunch the flow of blood, Calderón has sought to redefine it, claiming that 90% of those killed are involved in narco-trafficking. A general urged the media to report each death not as another murder victim but "one less criminal". Given so few homicides are properly investigated it is unclear how the president, general or anyone can know such things.

Miguel Morales has no doubt he would have been classified as a criminal. The 24-year-old, who would only speak under a pseudonym, was, after all, a thief and a junkie and haunted street corners where gangs peddled drugs. As his fixes progressed from pills to cocaine to heroin his body weight shrivelled to 50kg, a spectre. One of Juárez's estimated 80,000 addicts, his death – he had numerous scrapes with gangs and police – would have caused not a blip. He recounts all this in a matter-of-fact tone at a rehabilitation centre which has become his home.

Then his eyes blaze. "My story would have been buried with me." What angers him is not the prospect of dying so much as dying anonymous, forgotten. "Everyone has a story." This is his. Morales was from a middle class home but, shy and awkward, with a clumsy body and goggle eyes, jealous of a brother's effortless success, he started smoking cannabis at 14 to get through weekends. He progressed to harder drugs, dropped out of business college, lived rough, begged, stole, got high. Somehow he found a way back and now, clean, lives in the rehab centre. He mops the floors and gives talks to new arrivals. "It's not much of a story is it?" he smiles. "But I'm glad I can tell it."

In numbers: Four years of bloodshed

28,000+

Number murdered since Felipe Calderón launched his crackdown on cartels in 2006

84,000

Number of weapons confiscated

$400m+

Amount of suspected drugs money confiscated

963

Number of clashes between security forces and drug gangs (nearly one a day)

50,000+

Troops and federal police involved in the operation

$13bn

Estimated annual profit made by Mexican drug traffickers

90%

Proportion of cocaine consumed in the US that comes from Mexico