Cardenas was captured after a shoot-out

Osiel Cardenas was arrested in the northern Mexican city of Matamoros, in Tamaulipas state, on the border with Texas, Mexican Defence Secretary General Gerardo Vega Garcia told a news conference.

Mr Cardenas is the alleged head of the notorious Gulf cartel, responsible for smuggling drugs across the border into the United States.

He is suspected of involvement in a dozen murders and is also wanted by the FBI on several charges, including threatening federal agents sent to investigate him.

Mr Cardenas' arrest is the latest blow to the cartel, after his alleged right-hand man was arrested in Mexico last year.

Six-month sting

Mexican television showed dramatic pictures of a gun battle in Matamoros, moments before Mr Cardenas' arrest was announced.

A number of people, including at least two soldiers, were reported wounded in the firefight.

"[The] Mexican army and air force special forces working together brought about the capture of Osiel Cardenas," said General Vega.

He said Mr Cardenas was caught after a six-month operation in which authorities identified at least 300 people working for Mr Cardenas' organisation.

Mr Cardenas will reportedly be taken to a high security location in Mexico City.

Reward

Mr Cardenas, 35, is one of Mexico's most wanted men, and the FBI has offered a $2m reward for his capture.

The United States has requested his extradition to face charges of organised crime, drug trafficking, money laundering and assaults on federal agents.

In Matamoros in 1999, Mr Cardenas and his henchmen are reported to have ordered two American investigators at gunpoint to hand over an informant for execution, telling them: "You gringos, this is my territory, you can't control it so get the hell out of here."

General Vega said Mr Cardenas "will face justice here in Mexico first" on drug, weapons and homicide charges.

He is suspected of involvement in the recent killings of four Mexican anti-drug agents.

Mr Cardenas is believed to have been in charge of the cartel since 1991 after killing the man who recruited him.