Speaking in Los Algodones, a small, picturesque tourist town on the border outside of Mexicali, Fox said his administration was making unprecedented gains in fighting drug traffickers. He said U.S. and Mexican cooperation in fighting drug cartels had been steadily improving during his term, and that life in the border region was "normal."

"Here, everything is calm," Fox told a crowd of Mexicans and U.S. citizens. "Life at the border is normal and continues moving ahead. Fortunately, there are many visitors walking in the street, doing business, and greeting friends ? such is the relation between Mexico and the United States."

After his speech, Fox told a U.S. television station that there was no reason to fear traveling to the border. In response to questions over the diplomatic spat, Fox said "the problem is over."

Last week, the U.S. State Department issued a public announcement warning U.S. travelers of increased violent criminal activity, including murder and kidnapping, in the northern border region of Mexico. The statement does not discourage U.S. citizen from traveling to Mexico, but does warn them of risks in certain northern cities.

The announcement was followed by a letter from U.S. Ambassador to Mexico Tony Garza, which warned that "the inability of local law enforcement to come to grips" with the rising drug-related violence "will have a chilling effect on trade and tourism."

Garza's remarks drew angry rebukes from top politicians, including Interior Secretary Santiago Creel, who said Garza's comments "had gone to far."

Mexico has long been sensitive to perceptions of U.S. intervention, especially in relation to drug trafficking.