Mexico: The Next Iraq or Afghanistan?

March 24, 2009— -- The Obama administration may have announced its $700 million plan to help the Mexican government fight the powerful drug cartels, but the cartels have already geared up for a battle undergoing a "transition from the gansterism of traditional narco hit men to paramilitary terrorism with guerilla tactics," according to a confidential federal law enforcement assessment obtained by ABC News.

"We have a criminal insurgency by organized crime that may well be a precursor to civil anarchy in part or all of Mexico," warns the assessment.

U.S. officials tell ABC News that President Obama has been told the Mexican cartels have become a criminal insurgency, threatening to turn Mexico into an Iraq or Afghanistan. The powerful drug cartels have increased their use of paramilitary terrorism with guerilla tactics, including car bombs, grenades and roadside IED's.

"There is in fact an insurgency on both sides of the American-Mexican border and it's stepped up a lot in the last several years because the Bush administration ignored it and put its focus on Iraq," said ABC News counterterrorism consultant Richard Clarke.

"We have to do something now along the border, but just doing these little things that the administration announced today won't solve the problem in the long term," said Clarke.

Just last month, 15 to 20 masked gunmen in Durango, Mexico, raided the work site of a U.S. company and stole over 900 pounds of water gel explosives and detonators. Authorities are increasingly worried that these types of thefts will be on the rise and that the cartels will use the explosives to manufacture IEDs and other types of devices.