By Andrew Hay

TAOS, New Mexico Three bikers were killed and five wounded in a shootout at a motorcycle rally in Red River, northern New Mexico, on Saturday, in the latest clash between outlawed U.S. motorbike gangs, police said.

Members of the Bandido and Waterdog groups traded gunfire around 5:00 p.m. (2100 GMT) on the packed main street of the mountain resort town 75 miles northeast of state capital Santa Fe, State Police Chief Tim Johnson said on Sunday.

"It was just gangbanger on gangbanger," Johnson told a press conference in Red River, adding that no bystanders were injured.

Of the three killed, two were Bandidos and one was a Waterdog, the police chief said.

One of those killed was a New Mexico chapter leader for the Bandidos while one of those arrested was a Bandido leader from Texas, Johnson said. Jacob Castillo, a Waterdog from Rio Rancho, New Mexico was arrested and charged with murder, he said.

The confrontation began in Albuquerque, New Mexico's largest city, over a photo involving another gang, then spilled over to Red River's annual Memorial Day motorcycle rally, Johnson said.

Bandidos have been involved in at least three shootings in Texas and Oklahoma in the past two months, he said.

Some 28,000 bikers from across the country had been expected to attend the Memorial Day rally, which featured live music and remembrance ceremonies at the Vietnam Veterans Memorial in nearby Angel Fire.

Red River Mayor Linda Calhoun advised local businesses to close.

The incident came eight years after nine bikers were killed and 18 wounded in a shootout in Waco, Texas involving members of motorcycle groups such as the Bandidos and Cossacks.

Some of the wounded were transported to a hospital in Taos, New Mexico, around 25 miles to the southwest, where officials banned alcohol sales and established a curfew.

(Reporting by Andrew Hay in Taos, New Mexico; Editing by Andrea Ricci)