(Updates with shootout)

By Mica Rosenberg and Anahi Rama

CULIACAN, Mexico, May 13 (Reuters) - Thousands of troops rolled into Mexico's violent Sinaloa state on Tuesday to fight a powerful drug cartel run by the country's most wanted man, following a wave of police murders.

Armed, camouflaged soldiers arrived in military transport planes as helicopters hovered overhead in the state capital, Culiacan, and troops joined federal police to set up roadblocks and patrol streets.

Dozens of Hummer military vehicles, some with heavy machine guns, roared through the hot, rundown city on their way to the nearby town of Navolato, passing a bullet-ridden police vehicle on a tow truck.

As troops arrived in Culiacan, rival gunmen faced off in a battle near the city center, killing one man with an AK-47, a municipal police spokeswoman said.

Marijuana-producing Sinaloa, on Mexico's Pacific Coast, is home to a federation of drug gangs run by Joaquin "Shorty" Guzman.

He escaped from prison in a laundry van in 2001 and has declared war on rival cartels for control of lucrative smuggling routes into the United States.

"The last few weeks have been very violent in Sinaloa, with deaths and executions, with a bigger show of arms, brutality and firepower," Attorney General Eduardo Medina Mora told a news conference after a meeting with President Felipe Calderon's top security officials in Culiacan.

Interior Minister Juan Camilo Mourino said 2,723 troops, federal police and investigative police were arriving in Sinaloa to supplement the 2,000 soldiers involved in drug eradication efforts in the state.

The military deployment followed the killings last week of six senior police officers across Mexico, including Edgar Millan, one of Mexico's top federal policemen.

Police say Millan was killed in Mexico City by a hitman working for the Sinaloa cartel because of his leading role in the arrest this year of dozens of the gang's gunmen.

WELCOME ARRIVAL

Culiacan residents welcomed the troop deployment.

"It's a relief because life has been very traumatic over the past few days. You walk down the street with fear," said Candelario Hernandez, a 52-year-old carpenter having his car searched by soldiers.

More than 1,100 people have been killed in Mexico this year as drug gangs fight each other and the security forces.

Calderon, a conservative who has sent 25,000 troops and federal police to fight drug cartels across Mexico since late 2006, pledged last week to take back Mexican streets from drug peddlers and gunmen.

Much of his effort has been focused on fighting drug gangs along the U.S.-Mexico border, especially near Texas, where the Gulf cartel dominates.

"The Sinaloa cartel struck in Mexico City not only to kill troublesome officials ... but also to pose a problem for the Mexican government by increasing areas requiring forces, thereby requiring the government to consider splitting its forces," said George Friedman at the U.S.-based intelligence group Stratfor. (Addition reporting by Barbara Obeso)

AlertNet news is provided by