PANAMA CITY, March 29 (Reuters) - Panama's President Martin Torrijos ordered a police crackdown on criminal youth gangs on Thursday as a wave of violence that has plagued Central America in recent years spread to the isthmus' southern tip.

Torrijos spoke after police arrested at least eight suspected gang members in a poor inner-city neighborhood of Panama City where a gangland battle recently caused a fire that killed three children and destroyed more than 100 houses.

"These raids are going to intensify," Torrijos told a news conference. "We will not give up against the gangs, and we will hunt down those who want to join them without reservations."

He said he would ask Congress to increase prison time for youths convicted of homicide from seven to 12 years, and wanted to toughen laws to keep out immigrants with criminal records.

Gang violence has plagued Central America in recent years, with the 'Mara 18' and 'Mara Salvatrucha' gangs particularly active in Guatemala, Honduras and El Salvador, where they are blamed for beheadings and have threatened presidents.

Panama has about 100 youth gangs, bearing names like "The Children of the Cold Tomb" and operating out of poor neighborhoods in Panama City and elsewhere, officials say.

They are thought to be largely home-grown and not related to the gangs dominant in neighboring countries, but are blamed for crimes ranging from drug-trafficking to murder.

Drug-trafficking is an increasing problem in Panama, which borders cocaine producer Colombia to the north.

U.S. and Panamanian officials seized 11.4 tonnes of cocaine worth about $200 million earlier this month in a raid on a U.S.-bound ship, one of Central America's biggest ever busts.

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