Billions in 'Blood Money' Fuel Bloodshed In Juarez, Mexico

April 10, 2009— -- Juarez, Mexico is a city with a storied past. It is rich with character, from Spanish missionaries and Pancho Villa to bootleggers and musicians.

But over the past couple of years, drug wars have engulfed the city, and it has become one of the most dangerous cities in the Western Hemisphere.

Two giant drug cartels have been battling for control of Juarez, with its crucial strategic position just across the river from El Paso, Texas. The police are almost totally corrupt and ordinary citizens have been living in terror.

The ferocity and the savagery is appalling. There have been more than 2,000 murders over the past 14 months in Juarez, a city of roughly 1.5 million people. In a sign of sheer desperation, the Mexican government sent in the army six weeks ago.

Thousands of soldiers now patrol the streets.

"Nightline" joined one unit on their morning rounds. "Once you pass through security then you can do your job as journalists but first the security," a patrol officer told the crew.

The troops have imposed a kind of martial law: They pull over any vehicle that looks remotely suspicious, respond to tips phoned in by brave citizens, and conduct constant surveillance from the sky.

This troop surge has stemmed the carnage in Juarez -- for now. Murders went from 200 a month in January and February to fewer than 50 in March.

But no one knows if it will last, and Juarez remains a place haunted by the killings.

"Three guys were killed here while playing pool," said a local journalist, who, like many in Juarez, wanted anonymity. "Several people who survived the killings were taken here to this hospital. And the killers came in. The men came here to kill the guys inside the hospital."