UPDATE 3-Hurricane Ida strengthens, 42 dead in Salvador

* Floods, mudslides from rains kill 42 in El Salvador

* Ida could strengthen into a Category 2 hurricane

* Forecast to enter oil-producing Gulf of Mexico on Sunday (Recasts with details from El Salvador, previous MEXICO CITY)

CANCUN, Mexico, Nov 8 (Reuters) - Hurricane Ida strengthened off the Mexican resort city of Cancun on the Yucatan Peninsula on Sunday as heavy rains caused by the storm killed at least 42 people in El Salvador.

El Salvador's interior minister said more victims were expected to be found as rescue workers moved into areas cut off by mudslides in the Central American nation.

Ida was poised to enter the Gulf of Mexico later on Sunday and could gain additional strength as it churns towards the oil and gas production facilities of the central Gulf before weakening as it nears the U.S. Gulf Coast later this week, the U.S. National Hurricane Center said on Sunday.

Ida reached hurricane status again late on Saturday and packed top sustained winds of near 90 mph (145 kph), the hurricane center said in its 7 a.m. EST (1200 GMT) advisory.

Ida is a Category 1 hurricane, the lowest on the five-step Saffir-Simpson intensity scale, and forecasters said it could strengthen to a Category 2 hurricane later on Sunday. Gradual weakening was expected to begin by late on Monday.

A hurricane warning for the Yucatan Peninsula from Playa del Carmen to Cabo Catoche, north of Cancun was in effect. Such a warning means that hurricane conditions are expected within 24 hours.