I've lived in El Paso since 1990 and every time I've gone to Ciudad Juarez, I have always carried my passport; the reason being not for travel into Mexico but for the return back.
Mexican customs officials next to the Rio Grade don't care about anyone having a passport. But if you do travel along Mexico Route 45 south to the so-called "Garita 10kms" or the 10 kilometer perimiter, the officials there will then need to see that you either have a passport with a valid Mexican visa or you will need to apply for a tourist card on the spot.
Please note that starting January 1 2008, everyone entering the U.S. from Canada or Mexico will need to carry a passport to re-enter the U.S., so carrying a passport will then become a must. No longer then can one say "U.S." when an I.C.E. official asks about your citizenship.
Also, note that a driver license issued by any U.S. state or the U.S. military has NEVER nor will ever be considered as proof of citizenship (it can only be used a proof of place of residence, as foreign nationals can take up residency too). I happen to know this personally as one of my friends works as an I.C.E. agent and he told me of this fact.
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