The increasingly violent drug war has displaced hundreds of families across the US-Mexico border area [AFP]

Around 300 families have fled a small Mexican border town after six days of street battles between rival drug cartels.

Residents of Cuidad Meir, a town in Tamaulipas, took refuge in a nearby town on Thursday after days of gun battles between rival drug cartels.

"I feel a little safer, a little calmer. Last night was a little calmer, we were able to sleep peacefully," Rocio Hernandez, a woman from Ciudad Mier staying in one of the shelters in nearby Ciudad Miguel Aleman, said.

The battles began with the killing of a gang leader known as Tony the Tormenta (Spanish for "storm") by Mexican security forces last Friday.

Servando Lopez, the mayor of Miguel Aleman, said he has welcomed the families, who were staying at a Lion's Club in the town. Some women wept with fear and anxiety, and the group prayed in a large circle. It wasn't clear how long they would stay.

"This violence has caused an exodus from a lot of people from [Ciudad] Mier and Guerrero to Miguel Aleman," Lopez said.

The streets of Ciudad Mier, meanwhile, were empty on Wednesday afternoon and businesses were closed.

Also along the border, US federal authorities seized more than $2 million in undeclared cash at the Nogales port of entry in two separate stops.

Source: Agencies