Monterrey (Mexico), Aug 20 (EFE) The police chief of the Monterrey suburb of Apodaca in Mexico has said that his daughter, who was arrested in a shoot-out between soldiers and gunmen, worked for a drug cartel.

'This is a real mess ... everything I did for them (his children) and now this news. I don't know where to hide,' chief Amador Medina Trevino said in a press conference Wednesday.

The chief's daughter, Andrea Guadalupe Medina Lopez, was arrested Monday during a shootout in a residential neighbourhood in San Nicolas de los Garza, another city in the Monterrey metropolitan area.

Three gunmen and the Gulf cartel's local leader, identified as Refugio Garza Pescador, were killed in the incident, which prompted officials to warn residents to stay in their homes.

The shootout started when soldiers spotted several gunmen in an armoured SUV and began following them.

The gunmen took cover inside two houses that were surrounded by soldiers supported by federal and state police.

A blast from a grenade was heard and smoke began rising from one of the houses about 75 minutes after the standoff started.