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updated 5/26/2011 6:21:21 PM ET 2011-05-26T22:21:21

A gunbattle between rival drug gangs in western Mexico left 29 bullet-ridden bodies in fake military uniforms heaped across a roadway and inside bullet-riddled vehicles in the state of Nayarit, the army said Thursday.

The bodies, all male, were found Wednesday scattered around 14 shot-up trucks and sport utility vehicles, two of which had bulletproofing.

Television images of the scene near the town of Ruiz showed what appeared to have been a convoy of cartel vehicles that was ambushed or engaged by another column of gunmen on a stretch of rural highway. Military-style boots, bulletproof vests, hand grenades and thousands of rounds of ammunition were found at the scene.

Federal and state officials gave conflicting reports on the incident.

Nayarit state police said officers responding to reports of a kidnapping found four wounded men at the scene of the shootout. One injured person died later, and three remain at the hospital, Nayarit officials said.

The army said two suspects wounded in the battle were found at the scene. It was unclear if the two reported by the army were included in, or additional to, the state figure.

The army said in a statement that around the same time Wednesday, soldiers engaged in a shootout with armed suspects in a town about 35 miles (60 kilometers) north of Ruiz. Two suspects — a man and a woman — were killed in that confrontation. The military statement did not say whether the two shootouts were related.

Nayarit's attorney general Oscar Herrera told a radio station that preliminary reports indicated the two gangs involved in the fierce highway battle were the Sinaloa and the Zetas drug cartels. He said one of the two cartels kidnapped a man of the rival gang, which resulted in a car chase and subsequent gunfight.

Nayarit and the nearby states of Michoacan and Zacatecas have become battlegrounds for drug cartels fighting for control of the area.

The Sinaloa cartel, Mexico's most powerful, has long been active in Nayarit, which borders its home base in Sinaloa state, but the gang has recently been challenged by the Zetas and by remnants of the Beltran Leyva cartel.

In Michoacan, officials said more than 700 people fled their villages amid fighting between rival drug traffickers, which appeared to be unrelated to the Nayarit conflict.

Michoacan state Civil Defense Director Carlos Mandujano said Wednesday that the villagers were given refuge at five shelters.

It is at least the second time a large number of rural residents have been displaced by drug violence in Mexico. In November, about 400 people in the northern border town of Ciudad Mier took refuge in the neighboring city of Ciudad Aleman following cartel gunbattles. That shelter has since been closed and most have returned to their homes.

Mandujano said the villagers spent Tuesday night at a primitive water park in the town of Buenavista Tomatlan, with most sleeping under open thatched-roof structures.

Mandujano said state authorities were providing sleeping mats, blankets and food for those in the shelter.

Residents told local authorities that gunbattles between rival drug cartel factions had made it too dangerous for them to stay in outlying hamlets. The latest reports said arsonists were burning avocado farms in the nearby town of Acahuato.

"We woke up with fear (on Monday), but things appeared to have quieted down. It wasn't until later that morning that we saw SUVs with armed men driving by very fast and shooting at each other," said a woman who did not want to be named for security reasons.

Several displaced people said they would stay at the shelters all week before considering going back to their villages.

"I am not scared, but my children are," said a mother, who asked not to be quoted by name because of fear of retaliation.

The fighting in Michoacan is believed to involve rival factions of the Michoacan-based La Familia drug cartel, some of whose members now call themselves "The Knights Templar."

Mexico still has fewer people displaced by violence than countries like Colombia, according to the Norway-based Internal Displacement Monitoring Centre, which tracks such figures. It estimates about 230,000 people in Mexico have been driven from their homes, often to stay with relatives or in the United States. An estimated 3.6 million to 5.2 million people have been displaced by decades of drug- and guerrilla-war violence in Colombia.

Buenavista police chief Othoniel Montes Herrera said he has neither the manpower nor the armament to patrol rural areas frequented by drug gangs. Sending ill-armed officers out there "would be certain death, and we're not thinking of putting our personnel at that risk."

Drug violence has been on the rise in Nayarit, a Pacific Coast state known for its surfing and beach towns. In October, gunmen killed 15 people at a car wash in the capital of Tepic, an attack that police said bore the characteristics of organized crime. The bodies of 12 murder victims, eight of them partially burned, were found on a Nayarit dirt road a year ago. Officials have not identified the gangs fighting there.

And in Durango state, which borders Nayarit to the north, authorities have been excavating dozens of corpses from mass burial grounds used by drug cartel killers.

On Thursday, state police reported that two more bodies had been found in the latest excavation, bringing the total of bodies found at a seven lots in the state capital to 223.

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Associated Press writer Adriana Gomez Licon in Mexico City contributed to this report.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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