By Tim Gaynor

NACO, Mexico (Reuters) - When news broke of the airliners striking the twin towers in New York 10 years ago, Mexican bookkeeper Jose Manuel Madrid was readying for work in his tiny hometown on the Arizona border.

Watching the tragedy unfold on television, he had no inkling of how it would transform the lives of residents in the remote community of Naco straddling the international border.

"Nobody imagined the repercussions ... that these events would have" for us, said Madrid, now the mayor of Naco, a dusty ranching town of 6,000 residents in Mexico's northern Sonora State.

The September 11 attacks, orchestrated by al Qaeda militants, led to the largest shake-up of the U.S. federal government since the Cold War, with the founding of the Department of Homeland Security in 2003.

As part of its core mission of preventing "terrorists and terrorist weapons from entering the United States," the new Customs and Border Protection agency has since sharply boosted security on the nation's borders

The surge more than doubled the number of Border Patrol agents to 20,000. Infrastructure added to secure the Mexico border includes nearly 700 miles of additional fences as well as lights, sensors, cameras, ground radar and even unmanned surveillance drones.

The changes transformed the lives of residents in Naco, Mexico, and its namesake twin in Arizona -- which have strong community and family ties dating to before the Mexican Revolution more than a century ago.

As a mark of a sometimes quirky relationship, firefighters from the Arizona side used to race south to help their less well equipped colleagues put out fires in Mexico, and residents would hold a joint fiesta with a volleyball game over the waist high border fence. Those things no longer happen.

"We had to adapt to a new situation and get used to the changes," said Madrid, sitting in his office a couple of blocks south of the tall, steel border fence that now marks the international border.

TIGHTER SECURITY

On September 11, 2001, locals recall how Border Patrol agents armed with assault rifles immediately took up guard at the Naco station, although the larger changes to security have been incremental over the past decade.

Most noticeable is the new border wall. Whereas it once extended about a mile either side of Naco, a curtain of steel up to 15-foot (4.5-meter) tall now carves across 20 miles of the high grassland valley, lit at night by stadium-style lights, and monitored by video cameras.

The number of agents at the local U.S. Border Patrol station, meanwhile, has quadrupled to around 400. The station itself is being rebuilt at a reported cost of $40 million to include a new helipad, stabling for more than two dozen horses, as well as a gym, indoor shooting range and offices for agents.

As a measure of its success, the Tucson sector Border Patrol notes that drug seizures in the stretch of border including Naco have risen over the decade, while illegal immigrant arrests have plunged to 212,000 last year from highs of 616,000 in 2000.

"I believe, as an agent, we are more effective than we were 10 years ago, no doubt about it," said Tony Dominguez, a supervisory Border Patrol agent who has worked at the Naco station since before the attacks on New York and Washington.

"All the new infrastructure, the technology, the manpower increase -- it's given us an advantage to basically interdict anything that comes north," he added.

While the security surge has ended the volleyball match over the fence, it is welcomed by some on the Arizona side concerned about Mexican drug traffickers and even bandits slipping over the border.

"It feels a bit safer because of the wall," said local fire district chief Jesus Morales, who is the only elected official in the tiny, unincorporated Arizona town.

"It's ... a bit harder for people coming in to do bad stuff over here," he added.

'NOTHING'S CHANGED'

But other residents in the high desert valley are not persuaded that the buildup has been a benefit to the local community.

"With the wall, and the lights and the Border Patrol hovering over my house at five o'clock in the morning, I'm a lot less happy on the border now than I was," said Diane Daniel, who made soap and goats' cheese at her home near Naco at the time of the attacks.

Daniel is also skeptical that the surge at the border would prevent future attacks like those in 2001, carried out by 19 hijackers from several Arab countries who entered the United States legally.

"I think that the terrorists are either going to be domestic -- that would be my first concern -- or they are going to fly in First Class just like they did the last time," she said.

Local rancher John Ladd says some things have not changed since the attacks.

A decade on, a daily game of cat and mouse between the Border Patrol, smugglers and illegal immigrants continues to play out across his family's 14,000-acre (5,666-hectare) spread outside Naco, damaging fences and gates and letting livestock onto the highway.

"We've got cameras, we've got radar, we've got street lights, we've got more agents, we've got a wall," he said with a weary smile. "Nothing's changed."

(Editing by Cynthia Johnston and Greg McCune)