A system using cross polarization effects and an enhancement agent having citric or other similar alpha hydroxy acid to enhance confocal microscope reflectance images and particularly images of the nuclei of BCCs (basal cell carcinomas) and SCCs (squamous cell carcinomas) in the confocal reflectance images of excised tumor slices obtained during Mohs surgery by illuminating the tissue being imaged (a tumor slice) using polarized light. The reflected illumination is passed to a polarization analyzer, which passes the polarization component which is crossed with respect to the polarization of the illuminating light. The light from the analyzer is passed through the confocal aperture and detected. The section of the tissue either at the surface or within the tissue is scanned and the reflectance image is produced with enhanced visualization of the cellular or nuclear structure thereof thereby enabling determination of the extent of the tumor (cancerous cells) in the section. A method is also provided using the system for diagnosing cancerous cells in skin tissue.