BOGOTA, COLOMBIA, DEC. 2 -- Pablo Escobar, who revolutionized cocaine trafficking and built an empire on terror and drug profits, was killed today in a shootout with police in his home town of Medellin.

Escobar, known as the "Godfather," began his criminal career as a car thief and tombstone robber, but moved on to become one of the founders of the feared Medellin cartel, which grew to control more than 80 percent of the multibillon-dollar cocaine business in the United States.

One of the world's most wanted men, Escobar was shot on a rooftop, along with a bodyguard, a Defense Ministry communique said. Officials said he had been hiding out in Medellin for most of the past six weeks.

Police said the billionaire was barefoot and shirtless in the chase. The Defense Ministry said a joint team of police and soldiers swept into the house, where Escobar had apparently been hiding for several weeks. Escobar and his bodyguard fired on the troops, who returned fire and killed them both, the ministry said.

Witnesses at the house where Escobar was killed said they had seen the bearded drug lord attempting to flee across a roof before the police and army opened fire.

"I was working when I heard some shouting in the street, and I realized that a fat man without a shirt was walking on the roof of the house opposite," one man, who did not give his name, told the Reuter news agency. "At that moment, the man jumped toward another roof of the house and you could hear an amazing shootout."

"They offered resistance and died on the spot," Prosecutor General Gustavo de Greiff said.

De Greiff said an $8.7 million reward offered by the United States and Colombia for Escobar's capture would not be paid, because the information that led authorities to him came from government intelligence sources.

President Cesar Gaviria said in a nationally broadcast speech that Escobar's death "is a step toward the end of drug trafficking" and shows "it is possible to defeat evil."

President Clinton sent a congratulatory telegram to Gaviria saying, "Hundreds of Colombians -- brave police officers and innocent people -- lost their lives as a result of Escobar's terrorism. Your work honors the memory of all of these victims."

Stephen Greene, acting administrator of the Drug Enforcement Administration, said the shooting sent a message to drug traffickers. "No matter how powerful they are, no matter how much influence they say they have, no matter how much money they have, they are not immune to being pursued by legitimate governments," he said.

Police sources quoted by Reuter said telephone monitoring equipment provided by the DEA assisted in pinpointing the house where Escobar was hiding.

"On Wednesday Escobar made a call from a place in Medellin to his family in Bogota, and using an electronic system we managed to locate the place of the call," one source said. The family was in a luxury hotel in the capital, being guarded by troops, after returning from an unsuccessful attempt to take refuge in Germany.

The trafficker's mother identified his body.

Killing Escobar was a major victory for the government of Gaviria, which had been humiliated by Escobar and his ability to escape more than 1,500 men assigned to hunt him down.

Gaviria was embarrassed after he allowed officials to negotiate Escobar's surrender to the Colombian judicial system in June 1991. In exchange for Escobar's surrender, extradition was banned and he was guaranteed lenient treatment. Escobar was allowed to build his own luxury prison near the Medellin suburb of Envigado -- with hot tubs -- where parties with prostitutes were frequent and where he was able to direct his trafficking organization through telephone and computer hookups.

When the government finally moved to crack down, in July 1992, Escobar and his closest associates walked out of the prison. He had been on the run since, while most of his closest associates turned themselves in or were killed.

Police say Escobar and three other traffickers formed the Medellin cartel in the early 1980s. The others were Jorge Luis Ochoa, who surrendered to the government in 1991; Carlos Lehder, in prison in the United States; and Jose Gonzalo Rodriguez Gacha, killed by police in December 1989.

They built the Medellin cartel into the first organization with the capability of exporting tons of cocaine, rather than just pounds, and distributing narcotics across the United States. The organization was particularly ruthless in killing its opponents. In addition to trafficking charges, Escobar was wanted for ordering multiple homicides.

Since leaving prison, law enforcement officials said, Escobar's organization had lost much of its trafficking ability but retained some military strength.

The son of a schoolteacher and a small farmer, Escobar, who turned 44 Wednesday, revolutionized cocaine trafficking in the 1970s and 1980s, pioneering large-scale shipments first to the United States, then to Europe.

Unlike his rivals in the Cali cartel, Escobar and others in his organization craved recognition and overt political power. They also funded numerous social works around Medellin, winning the hearts of many in the poor areas who benefitted from the projects.

Escobar also demonstrated a ruthlessness in eliminating his enemies. He was wanted for masterminding the 1986 assassination of Guillermo Cano, editor of crusading anti-cartel El Espectador newspaper. In 1989, he allegedly ordered the murder of Sen. Luis Carlos Galan, a leading presidential candidate who favored extradition. In 1989, a car bombing and airline bombing left more than 150 people dead.

Escobar's group adopted the name "the Extraditables" because they were wanted in the United States and feared going to prison there. Their motto became "Better a tomb in Colombia than a prison cell in the United States," and they set out to end extradition.

Escobar was first arrested in 1974, for stealing a car. He walked out shortly after, but was rearrested in 1976, when he was found driving a pickup truck with cocaine in the spare tire. Again he was in prison for less than three months, freed when his case mysteriously kept disappearing in the courts. The arresting officer was killed five years later by traffickers.

In 1982, as he was revolutionizing the drug business, he was elected to the National Congress as an alternate representative from Envigado. Not only did this put him in the corridors of power, but his legislative immunity meant he could not be arrested.

Escobar was forced to resign from politics in late 1983, when Justice Minister Rodrigo Lara Bonilla began investigating him and his organization. Lara Bonilla was assassinated in a hail of gunfire April 30, 1984, the first high-profile assassination by the Medellin cartel.

The cartel hired the best gunmen in Medellin, becoming one of the most feared organizations in the world. The Extraditables began their next offensive in August 1989, with the assassination of presidential candidate Luis Carlos Galan, a staunch supporter of extradition.

Then-President Virgilio Barco declared the all-out war on the cartel, confiscating hundreds of properties, vehicles and airplanes suspected of belonging to it, and arresting hundreds of people. The police offered a $600,000 reward for the capture of drug kingpins.

In response, the Extraditables unleashed a wave of terrorism, setting off dozens of car bombs and offering rewards for every policeman killed in the Medellin area. More than 300 were killed.

The Associated Press reported from Medellin:

Escobar had been hunted not only by the security force but by a vigilante squad called People Persecuted By Pablo Escobar (PEPES), which killed several of his associates and threatened his family.

The vigilante squad is believed to be composed of members of the rival Cali drug cartel, disenchanted former Medellin cartel members and police avenging the deaths of officers slain by the cartel.

At one time, Escobar's drug trafficking gang was the world's biggest exporter of cocaine. But after his escape from prison, his empire was splintered by bloody internal rivalries and attacks by vigilantes and security forces.

The rival Cali cartel took over as the world's main supplier of cocaine. If Escobar's death leads to the Medellin cartel's collapse, the Cali cartel and other competitors are likely to try to pick up the Medellin business.