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Mexico’s business capital Monterrey since Thursday, a grisly sign of the escalating drug violence in the northern city, authorities said Saturday.

Acting on a tip from an informant, investigators have been digging up a rural area 12 miles east of Monterrey, uncovering dozens of corpses, some burned beyond recognition, others with bullet wounds, said the governor of Nuevo Leon state, where Monterrey is located.

“(Investigators) believe these could be people related to organized crime, a product of war between these cartels,” Governor Rodrigo Medina told reporters. “This is the level of violence we expect when these groups clash.”

Many of the victims found in the mass grave were believed to have died as recently as two weeks ago, police said.

Wealthy Monterrey, whose residents earn on average twice as much as other Mexicans, was until recently an oasis of relative tranquillity amid the drug violence that has gripped northern Mexico since President Felipe Calderon launched an army-led crackdown on drug cartels after taking office in late 2006.

But the modern, highrise city is no longer immune. Cartels have dumped their victims in streets, staged brazen kidnappings and even blocked off major roads to thwart the police.

Drug-related violence has killed more than 25,000 people throughout Mexico since Calderon launched his campaign, sending a chill through northern Mexico and alarming the United States, which worries the mayhem could spill across the border.

Financial markets, which in the past have not viewed the violence as a major risk, are now paying closer attention.

The assassination of the front-runner for governor just days before state elections earlier this month prompted a sell-off in the peso.

OTTAWA - Omar Khadr has lost another round against the federal government.

A Federal Court of Appeal judge sided with the Tories Thursday, saying the court wouldn’t enforce a previous ruling that could have made the government bring Khadr back to Canada - at least not until the feds can argue their appeal.

Khadr, 23, has been in a U.S. military prison in Guantanamo Bay, Cuba, since his 2002 capture in Afghanistan. U.S. prosecutors say Khadr threw a grenade that killed an American. He is due to go to trial Aug. 10.

Earlier this month, Federal Court Justice Russel Zinn gave the government one week to come up with a remedy but said he saw no other choice than to bring Khadr back to Canada.