One of three top leaders of Mexico's most powerful drug cartel, and considered a founder of the country's massive methamphetamine trade, was killed in a gunfight with soldiers Thursday.

Mexican drug cartel leader Ignacio Coronel Villareal, known as Nacho Coronel, is seen here in an undated photo. (FBI/Associated Press)

The death of Ignacio (Nacho) Coronel near the city of Guadalajara is the biggest strike yet against the Sinaloa cartel led by Joaquin (El Chapo) Guzman — Mexico's top drug lord — since President Felipe Calderon launched a military offensive against drug traffickers in late 2006.

According to the FBI, which offered a $5-million reward for the 56-year-old Coronel, he was believed to be "the forerunner in producing massive amounts of methamphetamine in clandestine laboratories in Mexico, then smuggling it into the U.S."

Gen. Edgar Luis Villegas said an army raid was closing in on one of Coronel's safehouses in an upscale suburb of the western city of Guadalajara, when the drug lord opened fire on soldiers.

"Nacho Coronel tried to escape and fired on military personnel, killing one soldier and wounding another," Villegas said at a news conference in Mexico City. "Responding to the attack, this capo died."

Villegas said the raid "significantly affects the operational capacity and drug distribution of the organization run by Guzman."

Authorities say Guzman, No. 2 Ismael (El Mayo) Zambada and Coronel formed the top three capos in the Sinaloa cartel. Coronel allegedly controlled trafficking routes through the states of Jalisco, Colima and parts of Michoacan — known as the Pacific route for cocaine smuggling.

Coronel's downfall came amid persistent allegations that Calderon's administration appeared to be favouring the Sinaloa cartel, or not hitting it as hard as other drug gangs.

Those allegations have drawn angry denials from the president and his top law enforcement officials, who point to the 2009 arrest of Vicente (El Vicentillo) Zambada — the son of Ismael Zambada — as proof they were going after the gang.

Massive raid

Coronel's death is the biggest blow against Mexico's drug gangs since drug lord Arturo Beltran Leyva and six of his bodyguards were killed in a Dec. 16 raid by Mexican marines in the central city of Cuernavaca.

Soldiers guard a street in the area where Coronel was killed during an army raid in Zapopan, near Guadalajara, Mexico, on Thursday. (Claudio Cruz/Associated Press)

An FBI statement on Coronel's drug trafficking organization said that "the scope of its influence and operations penetrate throughout the United States, Mexico and several other European, Central American, and South American countries."

During Thursday's raid, helicopters circled over the Guadalajara suburb of Zapopan, as soldiers appeared to search at least two homes. Soldiers arrested Francisco Quinonez Gastelum, alleged to be Coronel's right-hand man and the only associate allowed to accompany him to his mansion.

"Coronel used two homes as safe houses … and employed the tactic of being accompanied only by Quinonez Gastelum, to keep a low profile and not draw attention to himself," Villegas said.

Coronel was one of Mexico's most mysterious drug lords. On its web page of most wanted drug traffickers, the Mexican federal attorney general's office has three photographs of Coronel and gives his nickname, Nacho. There are only blanks after "age," "place of origin," and "personal characteristics."

The Mexican government has described Coronel as running his own criminal cell out of Zapopan. In 2006 raids on four Zapopan homes, federal police arrested five of Coronel's lieutenants and seized more than $2 million in cash, along with expensive watches and jewelry, but failed to find Coronel himself.

Coronel was born in the northern state of Durango, the home state of many of Mexico's drug traffickers and was groomed to be a drug lord from an early age.

He rose up under Amado Carrillo Fuentes, the so-called "Lord of the Skies" and leader of the Juarez drug cartel who died in 1997.

After Carrillo's death, Coronel joined the Sinaloa cartel and rose through the ranks to become the cartel's No. 3.