* Storm hit southern Mexico as hurricane, dumped heavy rains
* Two children dead after house collapsed
By Mica Rosenberg
ACAPULCO, Mexico, June 16 (Reuters) - Tropical Storm Carlotta weakened into a tropical depression on Saturday after battering Mexico's Pacific coast and killing at least two children whose house collapsed in a landslide.
The government of Mexico previously lifted the hurricane warning from Salina Cruz to Acapulco after Carlotta made landfall in the southern state of Oaxaca on Friday night, dumping rain on mountainous villages along the coast.
Carlotta became a Category 2 hurricane on the Saffir-Simpson intensity scale before weakening to a tropical storm earlier Saturday.
A mud-brick 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 state's 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 rain and strong winds," said Tovar.
Farther north, heavy rains lashed the tourist resort of Acapulco overnight. Skies were overcast in the resort on Saturday, but tourists returned to the beaches and hotel pools.
Melquiades Olemedo, head of emergency services for Acapulco city, said no major damages were reported - only sporadic power outages and trees downed by winds that reached 40 mph (60 kph).
Carlotta was located 50 miles (80 km) north-northeast of Acapulco on Saturday mid-morning as winds decreased to 35 miles per hour (55 kph), the U.S. National Hurricane Center said.
The storm is forecast to swirl inland over southern Mexico for the next couple of days, dumping between 4 to 8 inches (100 to 200 mm) 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 storm's 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 have much of an impact there.