Storm Carlotta weakens over Mexico's Pacific coast, two dead

* Storm hit southern Mexico as hurricane, dumped heavy rains

* Two children dead after house collapsed

By Mica Rosenberg

ACAPULCO, Mexico, June 16 (Reuters) - Hurricane Carlotta weakened into a tropical storm on Saturday after battering Mexico's Pacific coast and killing at least two children when their house collapsed in a landslide.

The government of Mexico lifted the hurricane warning from Salina Cruz to Acapulco after Carlotta made landfall in the southern state of Oaxaca on Friday, dumping rain on mountainous villages along the coast.

A mudbrick house collapsed in the town of Pluma Hidalgo, Oaxaca killing a 13 year old girl and her 7 year old sister, said Cyntia Tovar, a spokeswoman for the states' emergency services department. The girls' mother survived but was badly injured and taken to the hospital, Tovar said.

"The damage occurred during the night so we are still gathering information. There was no major flooding but a lot of ran and strong winds," said Tovar.

Heavy rains lashed the tourist resort of Acapulco further north overnight, but the showers had largely subsided by the morning.

Carlotta was located 40 miles (70 km) north of Acapulco on Saturday morning with winds of 45 miles-per-hour (75 kph), the U.S. National Hurricane Center said.

The storm is forecast to swirl inland over southern Mexico for the next several days, dumping between 4 to 8 inches (100 to 200 cm) of rain through Monday, the Miami-based center said.

"These rains could cause life-threatening flash floods and mudslides," the center said, adding that isolated rains of up to 15 inches (375 mm) are possible.

Carlotta, the third named storm of the Pacific hurricane season, passed north of Mexico's biggest refinery, the 330,000 barrel-per-day Salina Cruz installation, which remained open.

The storms' path was far from the Baja California resort of Los Cabos, where the Group of 20 leaders of top economies are convening on Monday and Tuesday. Authorities said they did not expect Carlotta to make much of an impact and that the airport remained open.