Two dozen gunmen burst into a casino in northern Mexico on Thursday, doused it with petrol and started a fire in which 53 people died and a dozen more were injured, authorities said.

The fire at the Casino Royale in Monterrey – a city that has seen a surge in drug cartel-related violence – was one of the deadliest attacks on an entertainment centre in Mexico since the president, Felipe Calderon, launched an offensive against drug cartels in late 2006.

"This is a night of sadness for Mexico," Alejandro Poire, a federal security spokesman, said in a televised address. "These unspeakable acts of terror will not go unpunished."

Calderon tweeted that the attack was "an abhorrent act of terror and barbarism" requiring "all of us to persevere in the fight against these unscrupulous criminal bands".

The Nuevo Leon state governor, Rodrigo Medina, told the Televisa network 53 people had been confirmed dead in the attack.

"But we could find more," the state attorney general, Leon Adrian de la Garza, warned, adding that a drug cartel was apparently responsible for the attack.

Cartels often extort casinos and other businesses, threatening to attack them or burn them to the ground if they refuse to pay.

State police officials quoted survivors as saying that armed men burst into the casino, apparently to rob it, and began dousing the premises with fuel.

The attackers told the customers and employees to get out, but many terrified customers and employees fled further inside the building, where they became trapped. Workers continued to remove bodies well into the night.

The Monterrey mayor, Fernando Larrazabal, said many of the bodies were found in the casino's toilets, where employees and customers had locked themselves to escape the gunmen.

The authorities commandeered backhoes from a nearby construction site to break through the building's walls to try to reach the people trapped inside.

Larrazabal said the casino, in a well-off part of Monterrey, had been closed by the authorities in May for building an extension without a permit, but a judge later granted the owner an injunction to continue operating.

Initial reports said 11 people had been killed, but the death toll climbed as emergency personnel and firefighters searched the building. Medics treated survivors for smoke inhalation.

State police officials initially said witnesses reported hearing three explosions before the fire started, but later said a flammable material was used. The reports of explosions may have been the sound of the ignition of the liquid.

It was the second time in three months that the Casino Royale had been targeted. Gunmen hit the casino and three others on 25 May, but no one was reported injured in those attacks.

Last month, gunmen killed 20 people at a bar in Monterrey. The attackers sprayed the bar with rounds from assault rifles, and police later found bags of drugs.

Monterrey has seen bloody turf battles between the Zetas and Gulf cartels in recent months. Drug-related murders in the city are on course to double last year's and triple those of the year before.