By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - A U.S. government agency on Tuesday rejected a land trade that would have allowed a controversial road to cut through a remote Alaska wildlife refuge and, scientists said, threaten to irreparably damage sensitive habitats.

Alaska officials quickly condemned the federal government's decision and said it would endanger the health of local residents who would have been served by the road.

In King Cove, a village of 960 people on the Alaska peninsula in the southwest part of the state, residents have complained of having difficulties traveling for medical care during bad weather.

The U.S. Fish and Wildlife Service said the proposal to build a road through the nearby Izembek National Wildlife Refuge should not be pursued because it would result in the permanent loss of wildlife habitats. The land trade proposal had been under consideration for over three years.

The decision will "protect the heart of a pristine landscape that Congress designated as wilderness and that serves as vital habitat for grizzly bear, caribou and salmon, shorebirds and waterfowl - including 98 percent of the world's population of Pacific black brant," U.S. Interior Secretary Ken Salazar said in a statement from the Fish and Wildlife Service.

The deal would have swapped about 56,000 acres (23,000 hectares of state- and native-owned land for about 200 acres within the Izembek refuge, which would have been used for the road.

Even though the state planned to give up far more territory than it would receive for the road, at issue was the wildlife habitat on the grounds to have been relinquished. Environmentalists said those lands were too ecologically valuable to be sacrificed.

As part of the deal, 1,600 acres in the Alaska Maritime National Wildlife Refuges also would have been relinquished by the federal government, but not used for the road.

Residents say they need a road to reach Cold Bay, a tiny community that has a larger, all-weather airport originally built for military uses. Neither King Cove nor Cold Bay has road access to more populated areas of the state.

However, the Fish and Wildlife Service, which rejected the land trade in a final environmental impact statement for the proposal, said other transportation options were available that would not cause the permanent damage a road would inflict.

Alaska politicians reacted sharply to the decision.

"I cannot fathom why the Fish and Wildlife Service prioritized a perceived risk to birds over an existing threat to human life," Governor Sean Parnell said in a statement.

"It's not surprising that people have lost faith in their government when irresponsible decisions like this are handed down from Washington," Alaska Senator Lisa Murkowski said also in a statement.

Both Murkowski and Parnell are Republicans.

Building a road would have cost about $20 million, according to the environmental study.

The decision is subject to a 30-day public review before it may be made final, officials said. Murkowski and Alaska Senator Mark Begich, a Democrat, said they will seek to convince Salazar to revisit the decision.

(Editing by Alex Dobuzinskis)