A U.S. Border Patrol agent was shot dead by suspected smugglers in a gun battle close to the Mexico border in southern Arizona and four suspects have been arrested, authorities said on Wednesday.

Agent Brian A. Terry, 40, was shot dead after he confronted several suspects while on duty with a special tactical team in a mountainous area a few miles northwest of the border city of Nogales late on Tuesday night, local and federal police said.

Police arrested at least four suspects, one of whom was wounded in the exchange of shots. They are searching for another who remains at large, the Santa Cruz County Sheriff's Office and U.S. Customs and Border Protection agency said.

"Our thoughts and prayers are with the Terry family for their tragic loss," CBP Commissioner Alan Bersin said in a statement.

"Our commitment to Agent Terry and his family is that we will do everything possible to bring to justice those responsible for this despicable act," he added.

The shooting comes amid growing concern in the United States over the potential for drug cartel violence to spill across the border from Mexico, where more than 33,000 people have been killed since President Vicente Calderon took office in 2006 and vowed to crush the cartels.

Arizona Governor Jan Brewer ordered state flags flown at half staff in tribute to Terry, a Marine Corps veteran from Detroit, Michigan, who served in the Border Patrol's Tucson sector.

BANDITS, SMUGGLERS

Agents patrolling the sector's 262-mile stretch of the Mexico border make around half of the illegal immigrant arrests and marijuana seizures recorded along the southwest border.

Santa Cruz County Sheriff Tony Estrada said the assailants were likely to be either smugglers who use the rugged, mountainous area west of Nogales to haul both drugs and illegal immigrants into the United States, or bandits who frequently prey on them, he said.

"That area is known to be a smuggling area, both human and drug smuggling," Estrada told Reuters.

"We don't know if they were protecting a load or preying on people who were coming through ... the area ... with drugs or humans," he added.

The FBI is leading the investigation into the agent's death, with the assistance of the Santa Cruz County Sheriff's Office.

The last Border Patrol agent to be killed on duty was Robert Rosas, 30, who was shot to death near Campo in southern California in July 2009. Police caught the killer, who was subsequently jailed with a 40-year sentence.