By Mica Rosenberg and Patrick Rucker
MEXICO CITY (Reuters) - Draped near 35 bodies dumped in broad daylight close to the busy port of Veracruz was an ominous message to Mexico's most violent drug cartel.
"This is going to happen to all you Zeta shits operating in Veracruz," read the banner found on Tuesday in the Boca del Rio shopping district of Veracruz. "The territory now has a new boss."
Many of the dead have links to organized crime, state officials said, but their gang loyalties are not yet known.
If they turn out to be Zetas, it would be the most brazen reprisal yet against the group, infamous for attacking a casino and massacring migrant workers, and could signal a new front in its battle with rivals in Veracruz.
While drug gangs have left their bloody mark on northern and western regions, Veracruz had been less affected until a few months ago and some now wonder if the Zetas' expansion could carry violence to even more parts of the country.
"It makes us very angry that this is happening, it makes us all feel impotent that these things are happening in Veracruz, which is a beautiful, peaceful state," said Isabel Hernandez, sales executive at the Costa Inn Hotel in Boca del Rio.
The Zetas, a paramilitary-style group founded by deserters from the army's special forces, are taking on more established gangs in turf battles. They have become one of the biggest challenges in President Felipe Calderon's bid to clamp down on the cartels, an effort that has left more than 42,000 dead in less than five years.
The group was once a small, specially-trained elite who protected the Gulf cartel's top brass but struck out on their own early last year and may boast as many as 10,000 members across Mexico, Central America and the United States.
They are blamed for the gruesome massacre of 72 Central and South American migrants last year and for firebombing a casino in the northern industrial town of Monterrey last month - an attack which killed more than 50 people, many of them women.
"The Zetas have become the focal point because of their extreme violence," said Eric Olson from the Mexico Institute at the Woodrow Wilson Center in Washington, adding that the Veracruz attack "is a reminder that the other organizations are going to push back."
The public warning was signed by "Gente Nueva," an armed wing of the powerful Sinaloa Cartel that is run by Mexico's most wanted man, Joaquin "Shorty" Guzman. His gang, along with the Gulf cartel, may be bringing its fight with the Zetas further south down Mexico's eastern coast.
A slender strip of land on the Gulf of Mexico, Veracruz state is home to some of Mexico's richest oil deposits, vast sugar cane and coffee fields and unusual racial diversity, due to African slaves who arrived at its ports.
A spree of recent attacks, though, has rattled inhabitants. Homicides skyrocketed to 249 this year, nearly five times more than in 2010, according to local media.
Drug bandits killed one man with a grenade in a popular part of Veracruz city last month and days later, a false rumor that gunmen were kidnapping school kids sent panicked Veracruz parents rushing to save their kids from harm.
Two people who sent warnings on their Twitter account spent weeks in jail accused of spreading terror, while violent criminals routinely slip through authorities' fingers.
More than 30 prisoners escaped local jails a day before the bodies were dumped in the upscale Boca del Rio district.
"There never used to be this type of conflict in the center of Veracruz," said academic Alberto Olvera from Veracruz University, adding that some people were now scared to leave their homes because of armed encounters in the streets.
"It was an organized massacre and leaving the bodies on a public road in broad daylight ... is a challenge to authorities as well as a settling of accounts."
Veracruz's busy port is a prime target for traffickers.
More than 1,600 trade ships docked in Veracruz last year and the tally of cargo containers leaving the port jumped roughly 30 percent from a year earlier, according to the Veracruz port authority.
Many are destined for the United States and Europe, and U.S. Attorney General Eric Holder this week said Mexico's cartels were using those trade channels to smuggle drugs.
(Additional reporting by Anahi Rama and Alex Leff; Editing by Kieran Murray)