(Adds U.S serviceman quote, details)

By Jimmy Sanchez

PUERTO CABEZAS, Nicaragua, Sept 7 (Reuters) - The number of people killed when Hurricane Felix tore into the border area of Nicaragua and Honduras this week has jumped to at least 130, a Nicaraguan rescue official said on Friday.

"We have around 130 corpses listed," civil defense official Fabio Benedic said. The dead were mainly Nicaraguan Miskito Indians, including some fishermen whose bodies washed up in Honduras.

Benedic said about 70 people were believed missing after high waves drowned fishermen, battered coastal villages and devastated islets known as the Miskito Keys.

A Nicaraguan newspaper said the death toll was 168.

Hundreds of people did not evacuate before the storm and had only their flimsy wooden shacks for shelter. Some tied themselves to trees or boats in a bid to withstand Felix's 160-mph (256-kph) winds, local fisherman said.

Nicaraguan police said residents of the Miskito Keys chose to ignore a warning by the navy of the looming storm, a monster Category 5 hurricane when it pounded the area with huge waves and screaming winds.

"A lot of people reckoned nothing was going to happen," senior policeman Carlos Rodriguez told the online version of La Prensa newspaper.

A motorboat loaded with 10 dead bodies found floating in the sea arrived at the port of Puerto Cabezas on Thursday evening. Villagers looked on in tears.

President Daniel Ortega visited Nicaragua's debris-strewn northern coast on Friday as a U.S. Navy ship, U.S. helicopters and a planeload of Venezuelan food aid arrived to help the rescue effort.

The storm, which brought back memories of Hurricane Mitch, which killed 10,000 people in Central America in 1998, struck the region's Caribbean coast on Tuesday, smashing thousands of wooden homes and flattening trees.

In Puerto Cabezas, locals chopped up fallen trees and piled trunks on sidewalks to free up blocked roads. Some power poles that had been knocked over were set upright and electricity returned to parts of the port.

U.S. serviceman Robert Cudd, who is based in Honduras and was working with helicopter relief crews to take water and basis foods to the hurricane-ravaged zone, said the destruction was widespread.

"Where we were landing, most rooftops were off almost every house," Cudd said.

Felix hit mainly the turtle-fishing Miskito Indians who live cut off from the world in sparsely populated marshlands dotted with lagoons and crocodile-infested rivers on the coasts of Nicaragua and Honduras.

Some 35,000 of the turtle-fishing Miskitos live in Honduras and more than 100,000 in Nicaragua.

Felix came hard on the heels of another Category 5 storm, the most powerful type of hurricane. Last month, Hurricane Dean killed 27 people in the Caribbean and Mexico.

It was the first time on record two Atlantic hurricanes made landfall as Category 5 storms in the same season, and the fourth time since records began in 1851 that more than one Category 5 had formed in a year. (Additional reporting by Ivan Castro and Brian Harris in Managua)

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