U.S. and Mexican officials say the Pentagon's Northern Command, the Department of Homeland Security and other agencies are discussing what aviation, surveillance and intelligence assets could be used—both inside Mexico and along the border—to help counter the drug cartels.

Officials say it is unclear how much of an expanded American role the Mexicans will accept. The scope of the U.S. effort is expected to grow but it is unclear how much. There is no consideration of sending U.S. troops other than in a training or liaison capacity, people familiar with the matter say.

Interagency talks about ramping up assistance have been discreet to avoid a public backlash in Mexico.

But the review is tacit acknowledgment that the Merida Initiative launched in 2008, in which Congress allocated $1.3 billion over three years to help Mexican drug-interdiction efforts, has been insufficient to stem the violence.

As part of the review, Homeland Security is working with the Air Force to identify the most useful military surveillance technology for monitoring land, sea and air traffic along the border. U.S. Customs and Border Protection spokesman Juan A. Muñoz-Torres said the technologies under consideration include "sensored manned aircraft and ground-based sensors" in addition to unmanned aerial drones.

Other officials said ground-based radar used by the military, the most sophisticated of which can be used to identify and track movement over a large area, is also being evaluated.

Officials say the U.S. has been working to boost Mexican capabilities to monitor cartel leaders' communications and pinpoint their locations. But U.S. agencies remain wary of sharing their most sensitive intelligence because of concerns that some of their Mexican counterparts may be on the payroll of the cartels, despite U.S. efforts to boost "internal integrity," they say.

Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, is "growing increasingly concerned about the security situation" and has asked his staff to work with NorthCom to explore increased engagement with the Mexican military, a U.S. military official said. "The question is what will the Mexican military accept from us."

The Mexican government appears increasingly open to greater cooperation in part because the security situation "is getting worse," the official added.

"We have certainly encouraged the U.S. to enhance and deepen cooperation with Mexico," said Mexico's ambassador to Washington, Arturo Sarukhan. "Whether it's guns and cash moving south and drugs moving north; breaking the command, control, communications and intelligence capabilities of transnational organized crime operating on both sides of our common border; or providing for human security, these challenges will all require that we move to a new stage of cooperation."

Any further U.S. military assistance to Mexico faces hurdles on both sides of the border. Mexico has been reluctant to accept direct U.S. military help and, with the Pentagon focused on Afghanistan and its expanding campaign against al Qaeda and its affiliates, it is unclear what the appetite will be inside the Department of Defense for a greater U.S. role, even if Mexico agreed to one.

But U.S. officials are ratcheting up the rhetoric, going so far as using the term insurgency to describe how Mexican cartels are challenging the government.

Secretary of State Hillary Clinton on Wednesday described the drug violence in Mexico as an "insurgency," saying "It's looking more and more like Colombia looked 20 years ago, when the narcotraffickers controlled certain parts of the country."

Mexicans leaders chafe at that characterization—terminology used to describe a politically motivated war against an incumbent government, such as the Taliban's fight in Afghanistan.

The language used by Mrs. Clinton was reminiscent of a controversial November 2008 U.S. military assessment that lumped Mexico together with Pakistan as running the risk of "rapid and sudden collapse" in a worst-case scenario.

"To frame the problem as an insurgency almost necessarily invites a military response," said Andrew Bacevich, a retired Army officer and professor of international relations and history at Boston University. "I would be skeptical that a response that puts a primary emphasis on military power would be appropriate."

"The military that once claimed to have war figured out with 'shock and awe' as a model now claims to have war figured out as counterinsurgency," he added. "Rather than treating different cases as distinctive, I think there is a tendency to apply the template, and today the template is counterinsurgency."

Henry Crumpton, a former top counterterrorism official at the Central Intelligence Agency and the State Department, said labeling the cartels an "insurgency" is the right way to frame the problem but is politically sensitive because of concern that the U.S. military will aim to take the lead in the U.S. effort to combat the Mexican drug problem. "That's particularly inflammatory to the Mexicans," Mr. Crumpton said.

Though Mexico is intertwined with the U.S. economically, many Mexicans would see greater American military involvement in the conflict as a breach of sovereignty.

Mexico's battle with organized crime has recently engulfed Monterrey, the nation's business capital, as two drug cartels battle for control of the city, once known as Latin America's wealthiest and safest. Murders, kidnappings and extortion have grown fast, with the complicity of local police forces believed to have been infiltrated by drug gangs. The violence is leading to an exodus of wealthy Mexicans and American expatriates.

Republicans have seized on border-security issues ahead of congressional elections in November, accusing President Barack Obama and his Democratic Party of not doing enough to prevent spillover of the violence to the U.S. side of the border.

In August, Mr. Obama signed a law that provides $600 million for new border technology—including two new Predator unmanned aerial vehicles—and additional Border Patrol, customs and law-enforcement agents. By the end of September, around 1,200 members of the National Guard are expected to be deployed to the southwestern border region to support the Border Patrol and other law-enforcement agencies.

Former officials say U.S. assistance to the effort has lagged in part because of the U.S. preoccupation with Islamist-led insurgencies in Afghanistan and Iraq. Mexico's resistance to more U.S. military help—compared to other countries like Colombia where the U.S. has played a far more hands-on role—has been another inhibiting factor and a source of U.S. frustration.

One problem with increased intelligence collaboration: U.S. agencies have been wary of sharing some intelligence because of concerns that some of their Mexican counterparts may be on the payroll of the cartels. "This is, to put it mildly, an extremely complex situation. We are assisting the Mexicans and stand ready to do more," a U.S. counternarcotics official said of intelligence sharing.

A former senior U.S. counternarcotics official said intelligence from the few Predator drones flying along the border is being shared with Mexican authorities. Far more surveillance is needed, officials say.

"We need to give credit to what President [Felipe] Calderón's doing taking on this issue," the official said. "But someone's going to have to come to the realization that there is a war going on down there and they're going to need help in combating that war."

*Siobhan Gorman and David Luhnow contributed to this article.