GUATEMALA CITY — U.S. inability to cut illegal drug consumption leaves Guatemala with no option but to consider legalizing the use and transport of drugs, President Otto Perez Molina said Monday, a remarkable turnaround for an ex-general elected on a platform of crushing organized crime with an iron fist.

Perez said he will try to win regional support for drug legalization at an upcoming summit of Central American leaders next month. He got his first public support on Monday at a security meeting with El Salvador President Mauricio Funes, who said he too is willing to consider legalization.

"We're bringing the issue up for debate. Today's meeting is intended to strengthen our methods of fighting organized crime," Perez said with Funes. "But if drug consumption isn't reduced, the problem will continue."

But after returning to El Salvador, Funes said he personally doesn't support legalization because it would "create a moral problem," though he supports Perez's right to bring up the issue for consideration.

"Imagine what it would mean," Funes said. "Producing drugs would no longer be a crime, trafficking drugs would no longer be a crime and consuming drugs would no longer be a crime, so we would be converting the region in a paradise for drug consumption. I personally don't agree with it and I told President Otto Perez so."

Perez's proposal comes as drug cartels have taken over large swathes of Guatemala and other Central American countries, fueling some of the highest murder rates in the world. A May 2011 report by the U.S. Congressional Research Service said that 95 per cent of all cocaine entering the United States flows through Mexico and its waters, with 60 per cent of that cocaine having first transited through Central America.

In just a month in office, Perez has transformed himself from one of Latin America's toughest advocates of military action against drug cartels to one of the region's strongest voices for drug legalization. His stance provoked strong criticism from the United States over the weekend, and intense discussion inside the country, where Guatemalans argued for and against his proposal in the streets and on radio talk shows.

One analyst said Perez's about-face could be designed to pressure the U.S. into providing military aid, currently banned by the U.S. Congress because of past human rights abuses.

"This is kind of like a shot across the bow, saying if you don't help us, this is what we can do," said Anita Isaacs, a Guatemala expert and professor of political science at Haverford College.

But Perez's backers said the change grew out of the realization that if demand continues in the U.S., the small country will never have the resources to fight the flow of illegal drugs from producers in South America to the world's largest consumer market in the U.S.

"Are we going to be responsible to put up a war against the cartels if we don't produce the drugs or consume the drugs? We're just a corridor of illegality," Eduardo Stein, a former Guatemalan vice-president who headed Perez's transition team.

"The issue of drug trafficking and consumption is not on the North American political agenda. The issue of drugs in the U.S. is very marginalized, while for Guatemala and the rest of Central America it's very central," he added.

U.S. President Barack Obama would cut funds to fight drug trafficking in Latin America in 2013, according to his budget proposal released Monday. While the Obama administration has promised to shift anti-drug resources from law enforcement and military intervention to treatment and prevention, funding would be restored to slightly higher than 2011 levels in the proposal after suffering a cut in 2012.

A growing number of former Latin American leaders have come out in favour of legalization, saying the U.S. efforts to fight drug trafficking in Latin America have only caused more violence and sucked up resources.

Colombia President Juan Manuel Santos has said he would be open to legalization if the entire world agreed.

"It's a theme that must be addressed," Colombia's Foreign Minister Maria Holguin told reporters in Cartegena Monday. "The war on drugs definitely hasn't been the success it should be and it's something the countries should discuss."

Honduras, another major transit country, has never formally considered legalization. Mexico President Felipe Calderon has said it wouldn't make sense to legalize drugs in the region as long as they remain illegal in the U.S.

Perez, 61, was elected in November and took office last month on a platform of cracking down on the country's rampant crime, a product of gang and cartel violence, along with the legacy of a bloody 1960-1996 civil war.

Army, police and paramilitary are blamed for killing the vast majority of 200,000 victims, most of whom were Mayan.

More than half of Guatemalans live in poverty in a nation of 14 million overrun by organized crime and Mexican drug cartels. Perez's predecessor, former President Alvaro Colom, sent troops to retake some provinces from the Zetas drug gang.

Perez, the first former general to be elected president since peace accords were signed in 1996, also took office with the mission of ending a long-standing U.S. ban on military aid imposed during the civil war because of concerns over human rights abuses.

Close advisers say he supports meeting the conditions set by various U.S. congressional appropriations acts for restoring aid that was first eliminated in 1978, including reforming a weak justice system and prosecuting war criminals.

But both U.S. and Guatemala officials agree that a reverse on the ban won't happen any time soon. Among other reductions, Obama's budget proposal cuts military aid to the region for fighting drugs by $5 million.

Perez first made his drug proposal over the weekend.

Political analyst Alvaro Pop said Guatemala would benefit from legalization "because it would get us out of a fight that has blocked our chances of developing as a country." But he added that Perez would have to carefully define exactly what he wants to legalize.

The U.S. Embassy in Guatemala issued a statement Sunday saying that legalizing drugs wouldn't stop transnational gangs that traffic not only drugs, but also people and weapons.