Mexican President Felipe Calderon has warned that drug gangs are seeking to replace the state and impose their own law in parts of the country.
The traffickers were intimidating and extorting communities, he said.
But Mr Calderon, speaking at the end of a three-day anti-crime conference, said the fight against gangs must continue despite rising violence.
More than 28,000 people have died in drug-related violence since he declared war on the drug cartels in 2006.
On the final day of the meeting in Mexico City, President Calderon said the drug gangs had moved beyond just trafficking narcotics and were seeking to dominate everyone else.
"This criminal behaviour has become an activity that not only defies the state but seeks to replace the state," he told delegates, including officials, researchers and religious leaders.
The gangs were imposing fees like taxes in areas they dominated and trying to impose their own laws by force of arms, said President Calderon.
He insisted his military-led crackdown on the cartels would continue, despite concerns about the level of violence.
During the conference, Mr Calderon accepted the need to widen the fight against the gangs to include better education and jobs programmes, and to involve more sectors of society.
He also said the government had to keep the public better informed about the strategy and scope of the drugs war.
On Tuesday, President Calderon also indicated that although he was opposed to legalising drugs, he would be open to a debate on the issue.
This week, the Centre for Research and National Security (Cisen), said 28,228 people had died in drug-related violence since December 2006.
This represented a big jump on the previous estimate of nearly 25,000 from the attorney general's office (PGR) in July.
But the government said there was no discrepancy between the figures.
The Cisen figures covered all drug-related killlings, while the PGR specifically counted what are termed "executions" where the victim is a member of a criminal band, the interior ministry said.