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MONTERREY, Mexico, Sept 14 (Reuters) - Mexico's attorney general said on Friday fewer drug-related killings at home and rising narcotics prices in the United States showed his government is winning the war against cartels.

President Felipe Calderon has sent thousands of troops and federal police to combat drug gangs since the start of the year but hitmen continue to carry out daylight revenge attacks across Mexico. A police chief of the central state of San Luis Potosi was killed by gunmen on Thursday.

Attorney General Eduardo Medina Mora said that while cartels were still powerful, the number of drug killings this year in Mexico has steadily fallen, from a peak in March of 319 deaths to 195 in August.

Cocaine and methamphetamine prices are rising across 8,000 U.S. towns and cities and purity is falling, showing fewer drugs are getting into the United States, he added.

"Average wholesale prices for cocaine have risen from $17,000 (per kg) the end of 2006 to almost $30,000 last month," Medina Mora said at a news conference in the northern Mexican city of Monterrey.

Medina Mora said the price of cocaine in Mexico had also risen and the price of marijuana, which has been falling because of increased local production, had stabilized.

Mexico is the main smuggling route for South American cocaine into the United States. Mexican kingpins dominate the international drug trade, also shipping synthetic drugs from Asia and home-grown marijuana into U.S. and European markets.

Turf wars between cartels in Mexico vying for control of the lucrative drug trade have killed more than 1,600 people this year and some 2,000 people in 2006.

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