OAXACA, Mexico (By James C. McKinley Jr. NYTimes) August 24, 2006 — For three months, civil unrest has gripped this lovely colonial city like a hound with a rabbit, leaving two people dead, crippling the tourist industry and shuttering schools.

The original cause of the strife — a teachers’ strike for better pay — has become lost in the escalating violence and the revolutionary demands of the protesters, who now demand that Gov. Ulises Ruiz step down.

The teachers’ union has been joined by scores of social organizations, some of them with leftist philosophies.

They have shut down highways, taken over five radio stations, burned more than a dozen buses, blocked off the city’s historic square, seized government offices, destroyed the stage for an annual cultural fair and barricaded tourists in their hotels. The state government has lost control of the center of the city, including its own offices, and is working out of improvised quarters with cellphones. Though each side has asked for federal intervention, President Vicente Fox has refused to send in troops. He has dispatched negotiators from the Interior and Labor Ministries, who have been unsuccessful in resolving the conflict.

On the national level, Mexico has been engulfed in a political crisis since the leftist presidential candidate, Andrés Manuel López Obrador, narrowly lost the July 2 election, according to an official tally. He has accused his conservative rival, Felipe Calderón, of fraud and mounted similar protests in Mexico City, taking over the central square.

Though the conflict here started well before the election, it has added to the country’s overall angst, feeding fears that left-wing groups will use Mr. López Obrador’s movement to foment unrest, with heavy-handed counterattacks by people in power.

Governor Ruiz, of the Institutional Revolutionary Party, which long ruled this state with a iron hand, has accused local leaders of Mr. López Obrador’s party, the Party of the Democratic Revolution, of taking part in the protests, adding yet another layer of politics to the conflict.

Early on Tuesday, police officers in a convoy that had been sent to clear blocked streets opened fire on a radio station that the protesters had seized. In the gunfire, Lorenzo San Pablo Cervantes, 52, an architect who worked for the state, was killed, the police said. It is unclear whether he was a bystander or was supporting the strikers.

The protesters seized about a dozen radio stations on Monday afternoon after unidentified gunmen destroyed the broadcasting equipment of Channel 9, a public television and radio station the strikers and their allies commandeered early this month to spread their version of events, the authorities said.

The state attorney general, Lizbeth Caña, said someone had fired at the officers from roofs near the station, starting the gunfight. But witnesses said the police had opened fire twice without provocation.

“They are the ones who brought arms, and we had nothing but rocks,” said Manuel Díaz, 40, a teacher, who was keeping a tense guard on Wednesday with an ax handle outside the radio station where the shooting had occurred. “Ruiz talks out of both sides of his mouth. On the television he calls on us to negotiate. But in the streets at night, he tries to kill us.”

On Aug. 10, Eleuterio José Jiménez Colmenares, 50, an auto mechanic and the husband of a teacher, was shot and killed during a march to support the strike as he chased youths who had thrown rocks at marchers.

Enrique Rueda Pacheco, the leader of the 70,000-member teachers’ union, said the deaths, and Mr. Ruiz’s use of tear gas and riot police in an attempt to dislodge the protesters from the city center on June 14, had made it impossible for the teachers to accept anything less than his resignation. Their demands for more pay are no longer the primary issue, Mr. Rueda Pacheco said.

“The fundamental problem has been the lack of interest of the state and federal governments,” he said in an interview. “They bet the teachers would just go away.”

Miguel Ángel Concha, a spokesman for Governor Ruiz, said the state lacks the money to meet the teachers’ salary demands. The teachers had asked for a pay package that would have cost $150 million, while the state’s final offer in June was about $8.5 million. The teachers also have asked for about a dozen improvements, including new books and more classrooms, for a state school system that serves hundreds of thousands of students.

Mr. Ruiz’s aides acknowledged that the government made an enormous error on June 14 when it used force, angering many teachers who were used to an annual strike and a resulting pay increase. An unconfirmed rumor that a woman and two children had died in the attack because of tear gas has become gospel among the protesters, though no bodies have been found.

Beyond the salary dispute, however, are old political rivalries. Mr. Ruiz narrowly won election over a leftist candidate in 2004, and many of the teachers and other protesters view his victory as illegitimate. They also accuse his police force of at least 35 political killings of civilians, which the government strongly denies. Finally, Mr. Ruiz vowed to end the yearly teachers’ strikes that previous governors had routinely settled by granting raises.

Ms. Caña, the attorney general, charges that groups seeking to overthrow the government have infiltrated the union. “These people are saying ‘Hit me, so I can denounce you for hitting me,’ ” she said. “They are generating instability and chaos.”

On Tuesday night, demonstrators gathered in the Zócalo, the central square, to watch a documentary made by protesters on televisions they had set up. The film accuses Mr. Ruiz not only of killing scores of his political enemies, but of being a pawn for global capitalism.

Now, the once jewel-like center of Oaxaca is a mess. Protesters have stolen buses and used pickup trucks to block streets, along with rocks, barbed wire and ropes. Graffiti declaring Mr. Ruiz an assassin defaces most of the buildings. Tents and tarps shelter protesters, who burn tires and garbage at night, keeping an eye out for the police. The city’s once-prosperous tourism industry is gasping for air. More than 1,000 hotel workers have been laid off, and tourists have canceled reservations well into 2007. The hotel and motel association estimates that the industry has lost $150 million in the last three months, not to mention the embarrassing cancellation of the Guelaguetza cultural festival here.

“No one has won anything here,” said Fredy Alcántara, the president of the association. “No one has come out ahead.” The federal government must intervene, he said, adding, “We are desperate.”