This is supposed to be the year of Mexico’s giant leap into the future. Instead, political violence of a kind not seen since the 1970s evoked Mexico’s tragic birthright, a struggle between the country’s privileged and its indigenous peasants. By the time the army drove the rebels back into the pine-covered hills last week, more than 100 people had died in the uprising in southern Chiapas state, including 61 rebels. The little-known group, named for revolutionary Emiliano Zapata, may have as few as 2,000 members, hardly enough to threaten the state. But even a localized guerrilla war endangers Mexico’s precious new image. with the NAFTA battle won, President Carlos Salinas de Gortari’s government is trumpeting investment opportunities in the country’s booming north. Last week the south evinced a different reality: Mexico’s poor are still getting poorer. The uprising, said Roderic Camp of Tulane University, “brings out things the government has tried to keep hidden.”

Southern Mexico remains an embarrassingly brutal and backward place. Plantation bosses–caciques–run Chiapas in tandem with Salinas’s ruling Institutional Revolutionary Party, often giving the local Indians short shrift. With only 3 percent of Mexico’s people, Chiapas Produces a quarter of its land disputes. On a farm outside the town of Altamirano, held briefly by rebels last week, Indian farmer Eugenio Santiz, 45, said a San Cristobal cacique recently took almost 1,000 acres of the community’s land with the government’s blessing–and jailed those who complained. “I have to say that what [the rebels] are demanding is what we’re demanding,” Santiz said, Rebels said their movement is based in a remote corner of Chiapas where Indians were resettled in a logged-out rain forest 25 years ago, then were left practically without government services.

Did outsiders stir up this explosive mix? Salinas’s government said as much by reporting that the rebels’ leader, “Comandante Marcos,” is “blond, green-eyed and speaks four languages” and that many of his fighters are foreigners. Witnesses to last week’s worst battle, in Ocosingo, said they suspected that some of the guerrillas were from neighboring Guatemala. U.S. State Department officials said they had no evidence of such meddling. Direct outside aid appeared to be minimal. In Ocosingo, dead and dying guerrillas lay sprawled in the streets and market stalls clutching outdated, small-caliber rifles and wearing machetes and backpacks sewn from feed bags. One guerrilla had a toy rifle carved from wood, with a pocket knife for a bayonet.

With the rebels on the run, Salinas moved quickly to cut his losses. Officials announced new food programs, farm credits and other antipoverty measures. But the army’s counterattack could discredit the government. Some of the rebel dead in Ocosingo appeared to have been executed; correspondents witnessed army planes firing at a group of Indian women and girls, barely missing them. The rebels seemed intent on embarrassing the government as it prepares for a presidential election. At the weekend, the Zapatistas took credit for explosions that downed telephone towers in the states of Puebla and Michoacan, and were suspected in a Mexico City car bombing that injured a woman in a parking garage. Fresh skirmishes were reported in the south. Ragtag as it is, Latin America’s newest guerrilla movement could well bedevil Mexico’s ambitious drive to join the First World.