The U.S. Centers for Disease Control and Prevention said tests show some of the Mexico victims died from the same new strain of swine flu that sickened eight people in Texas and California.
Mexico put the confirmed toll at 20 dead, but 40 other fatalities were being probed, and at least 943 nationwide were sick from the suspected flu, the health department said.
Scientists said the virus combines genetic material from pigs, birds and humans in a way researchers have not seen before.
"We are very, very concerned," spokesman Thomas Abraham said.
"We have what appears to be a novel virus and it has spread from human to human," he said. "It's all hands on deck at the moment."
President Felipe Calderon cancelled a trip and met with his Cabinet to coordinate Mexico's response.
The government planned to administer its remaining 500,000 vaccines from the flu season to health workers, the highest risk group, although it is not known how effective they are on swine flu. It said it also has enough oseltamivir, the generic name of Tamiflu, to treat 1 million people, but the medicine will be strictly controlled and handed out only
The CDC says Tamiflu and Relenza do seem effective against the new strain. Roche, the maker of Tamiflu, said the company is prepared to immediately deploy a stockpile of the drug if requested. Both drugs must be taken early, within a few days of the onset of symptoms, to be most effective.
Authorities urged people to avoid hospitals unless they had a medical emergency, since hospitals are centers of infection.
They also said Mexicans should refrain from customary greetings such as shaking hands or kissing cheeks, and authorities at Mexico City's international airport were questioning passengers to try to prevent anybody with possible influenza from boarding airplanes and spreading the disease.
But the CDC said Americans need not avoid traveling to Mexico, as long as they take the usual precautions, such as frequent handwashing.
"We certainly have 60 deaths that we can't be sure are from the same virus, but it is probable," said Health Secretary Jose Cordova. He called it a "new, different strain ... that originally came from pigs."
Epidemiologists are particularly concerned because the only people killed so far were normally less-vulnerable young people and adults. It's possible that more vulnerable populations - infants and the aged - had been vaccinated against other strains, and that those vaccines may be providing some protection.
All eight of the California and Texas residents recovered from symptoms that were like those of the regular flu, mostly involving fever, cough and sore throat, though some of the seven also experienced vomiting and diarrhea.
Scientists have long been concerned that a new flu virus could launch a pandemic, a worldwide spread of a killer disease. A new virus could evolve when different flu viruses infect a pig, a person or a bird, mingling their genetic material. The resulting hybrid could spread quickly because people would have no natural defenses against it.
The most notorious flu pandemic is thought to have killed at least 40 million people worldwide in 1918-19. Two other, less deadly flu pandemics struck in 1957 and 1968.
Nobody can predict when pandemics will happen. Scientists had been concerned about swine flu in 1976, for example, and some 40 million Americans were vaccinated. No flu pandemic ever appeared, but thousands of vaccinated people filed claims saying they'd suffered a paralyzing condition andother side effects from the shots.
In recent years, scientists have been particularly concerned about birds. There have been deaths from bird flu, mostly in Asia, but the virus has so far been unable to spread from person to person easily enough to touch off a pandemic.
Closing the schools across the metropolis of 20 million kept 6.1 million students home from day care centers through high schools, and thousands more were affected as colleges and universities closed down. Parents scrambled to juggle work and family concerns due to what local media said was the first citywide schools closure since Mexico City's devastating 1985 earthquake.
Authorities also advised capital residents not to go to work if they felt ill, and to wear surgical masks if they had to move through crowds. A wider shutdown - perhaps including shutting down government offices - was being considered.
"It is very likely that classes will be suspended for several days," Cordova said. "We will have to evaluate, and let's hope this doesn't happen, the need to restrict activity at workplaces."
Mexico's initial response in its overcrowded capital brought to mind other major outbreaks - such as when SARS hit Asia. At its peak in 2003, Beijing was the hardest-hit city in the world. Schools, cinemas and restaurants were shuttered to prevent the spread the deadly respiratory virus, and thousands of people were quarantined at home.
In March 2008, Hong Kong ordered more than a half million young students to stay home for two weeks because of a flu outbreak. It was the first such closure in Hong Kong since the outbreak of SARS, or severe acute respiratory syndrome.
Lillian Molina and other teachers at the Montessori's World preschool scrubbed down their empty classrooms with Clorox, soap and Lysol on Friday between fielding calls from worried parents. While the school has had no known cases among its students, Molina supported the government's decision to shutter classes, especially in preschools.
"It's great they are taking precautions," she said. "I think it's a really good idea."
Still, U.S. health officials said it's not yet a reason for alarm in the United States. The five in California and two in Texas have all recovered, and testing indicates some common antiviral medications seem to work against the virus.
Schuchat of the CDC said officials believe the new strain can spread human-to-human, which is unusual for a swine flu virus. The CDC is checking people who have been in contact with the seven confirmed U.S. cases, who all became ill between late March and mid-April.
The U.S. cases are a growing medical mystery because it's unclear how they caught the virus. The CDC said none of the seven people were in contact with pigs, which is how people usually catch swine flu. And only a few were in contact with each other.
CDC officials described the virus as having a unique combination of gene segments not seen in people or pigs before. The bug contains human virus, avian virus from North America and pig viruses from North America, Europe and Asia.
Health officials have seen mixes of bird, pig and human virus before, but never such an intercontinental combination with more than one pig virus in the mix.
Scientists keep a close eye on flu viruses that emerge from pigs. The animals are considered particularly susceptible to both avian and human viruses and a likely place where the kind of genetic reassortment can take place that might lead to a new form of pandemic flu, said Dr. John Treanor, an infectious disease specialist at the University of Rochester Medical Center.
The virus may be something completely new, or it may have been around for a while but was only detected now because of improved lab testing and disease surveillance, CDC officials said.
The virus was first detected in two children in southern California - a 10-year-old boy in San Diego County and a 9-year-old girl in neighboring Imperial County.
It's not known if the seasonal flu vaccine Americans got this winter protects against this type of virus. People should wash their hands and take other precautions, CDC officials said.
Associated Press Writers Maria Cheng in London, Traci Carl in Mexico City and Mike Stobbe in Atlanta, Georgia, contributed to this report.
Copyright 2009 The Associated Press.