WOUNDED KNEE, South Dakota (Reuters) -- Over the past 15 years, violent youth gangs have invaded Indian reservations, bringing terror, drugs and vandalism to societies that were already in deep distress.

On the Pine Ridge Reservation of South Dakota, inhabited by 15,000 to 20,000 members of the Lakota Sioux, police believe there may be 3,500 acknowledged gang members.

"In the village of Pine Ridge alone, we have a dozen gangs -- Outlaws, Wild Boyz, Trey Trey, Nomads, Iggy Boyz, Aimster Gangsta, Wild Girls, Bad Ass Bitches, Southside Boyz, Northside Boyz and Gangsta Disciples," said John Mousseau, an officer with the Bureau of Indian Affairs tribal police who specializes in combating gang activity.

"Every little community on the reservation has its gang or gangs. There's one little place -- Potato Creek. It only has 40 residents but it has a gang with 15 members," he said.

The gangs deal in cocaine, marijuana and increasingly in methamphetamine. Some, like the Nomads, have a command structure with a ruling council and a set of laws.

"Gang members are responsible for close to 70 percent of crimes on the reservation -- assaults, sexual assaults, intimidation, harassment, burglaries, vandalism, graffiti and sometimes murder," Mousseau said.

Police chief James Two Bulls said there were 10 to 12 homicides on the reservation each year. Alcohol is almost always involved. Although the reservation is officially dry, residents can easily buy beer across the Nebraska state line.

The population is highly transient. Young people who joined gangs in cities bring gang culture to the reservation. Others learn the gang lifestyle in prison.

Last July, Mousseau responded to reports of gunfire in a house. Mousseau was questioning a girl when someone inside the building opened fire with a semi-automatic assault rifle. -------Bullet Grazes Ear-------- "The girl was hit and a bullet grazed my ear, Mousseau recalled. "I took cover in the weeds and pulled the girl to safety. I called for backup but the guy was still shooting. It was dark but I fired back in the direction of his muzzle flashes. I hit him and he died on the scene. He had fired 30 rounds."

The girl survived. The dead man, a known gang member, had been drunk as well as high on drugs.

Mousseau believes he was the target of an organized hit because he was interfering with gang operations. He had to move himself and his family out of town for a time after receiving death threats from other gang members.

Residents of South Dakota's reservations are among the poorest in the nation. Unemployment hovers around the 80 percent mark. Of those employed, 96 percent live below the poverty line and alcoholism is rife. Apart from school athletic teams, there are few organized youth activities.

Young people in the reservation are in deep crisis, said Bryan Brewer, principal of the Pine Ridge High School. "About 50 percent of our students drop out, mostly in the first two years of high school," Brewer said. "We don't know where they go. They just stop coming. Of the kids who enroll, only one percent graduate college."

Gang members constantly deface the school with graffiti. They bring guns and deal in drugs on the school grounds. They sometimes make homemade weapons in the school metal workshop. Three years ago, scores of rival gang members fought a violent battle in a school corridor.

Brewer once asked a couple of gang members how many students were members of the Trey Trey gang. "They told me over half of our students were in that one gang alone," he said. ---------Gangs Mimic Behavior------

Indian gangs mimic the behavior of black and Hispanic inner-city gangs -- the colors, the dress, the violent initiation ceremonies, the hand signals, the graffiti, the tattoos. But they have developed one wrinkle of their own, said Captain Christopher Grant, chief of detectives in Rapid City, South Dakota, who is an expert on the subject.

"They will burn and brand designs into their arms and bodies, such as pitchforks or other gang symbols. They will heat a knife or a metal clothes hanger until it is red hot and then press it to their flesh and leave it to fester so it makes a big vivid scar that announces their involvement in the gang subculture.

"Sometimes, they just slash themselves with knives to create markings that depict their gang involvement, and oftentimes both the burning and cutting become a rite of passage for the young people who choose this path," he said.

Chris Eagle Hawk, a police human resources officer on the reservation who would like to revive Indian cultural awareness, said young people have no sense of their own identity or culture and look for something to fill the gap.

"They need to belong somewhere, to be part of something. They don't know anything about who they are and where they come from. We have our own colors, our own songs, our own language. We even have our own signs," he said.

Despite the problems, police officers said it was difficult to persuade parents and some members of the tribal leadership of the gravity of the situation.

One day this month, Mousseau and several other police officers went to the village of Wounded Knee, site of a notorious massacre of Indian men, women and children by U.S. troops in 1890. The police had invited members of the community to a question-and-answer session about gangs.

Only three people showed up.