Soldiers found the corpses last week in San Fernando in Tamaulipas state near Texas and initially unearthed 59 bodies, but the toll has since risen steadily in one of the most gruesome finds so far in Mexico's escalating drug war.

"Today we can confirm the discovery of a total of 116 people killed in this criminal act ... by the Zetas," Attorney General Marisela Morales told a news conference in Mexico City, flanked by the country's interior minister.

The body count could still rise and Mexican media said 128 corpses had now been recovered in San Fernando. Authorities in Tamaulipas declined to comment on the figure.

More than 37,000 people have been killed since President Felipe Calderon sent in the army to fight the drug gangs in 2006, worrying Washington and some investors and tarnishing Mexico's international image as a top tourist destination.

The victims in Tamaulipas, one of the drug war's worst flashpoints, may have been killed after refusing to work for the Zetas, according to media reports. The gang is increasingly making a name for itself as the most violent of Mexico's powerful cartels.

Morales said 17 suspects had been arrested in the government's investigation, but she declined to give more details about any possible motives for the massacre or the identities of the victims.

The graves were near a ranch where 72 Central and South American migrants were killed last year by the Zetas preying on undocumented migrants heading north in search of work in the United States.