By Steve Taylor

EDINBURG, Texas, Feb 8 (Reuters) - Federal officials said on Friday they will raise a stretch of Rio Grande river levees in Texas instead of building a small section of the controversial U.S.-Mexico border wall across the property of reluctant landowners.

The compromise only applies to about 22 miles (35 km) along the border in Hidalgo County, a small section of the 370 miles (595 km) of border fencing the Department of Homeland Security plans to build by the end of the year.

"This will serve both Border Patrol's need to have an effective barrier against smuggling and illegal migration and this community's need to upgrade its levees and protect against natural disasters," Homeland Security Secretary Michael Chertoff told reporters.

"This is a great example of a project that when it's concluded at the end of this year will serve both of those functions. It's a win-win outcome," he said at the border patrol headquarters in Edinburg, Texas.

Levees are man-made embankments to prevent flooding. The ones in the area will be reinforced with 18-foot-high (six-metre) concrete barriers with sheer faces.

Stefanie Herweck of the No Border Wall Coalition said the government's "assertion that these are not walls is just spin. They are making the deal sound sweeter than it is."

The federal government says a wall is needed to stem the tide of illegal immigration from Mexico, but it is hugely unpopular with communities along both sides of the border.

Ranchers are concerned about their access to the river and other property owners do not want the fence slicing across their land. Environmentalists fear that wildlife migration routes could be blocked while outdoor enthusiasts do not want to lose their access to the Rio Grande.

A Texas woman whose property has been in her family for more than 250 years has filed a class-action suit to keep the U.S. government from surveying her land for the border fence, in the latest skirmish over federal efforts to fight illegal immigration.

Lawyers for Eloisa Tamez, a descendant of Basque settlers and Native Americans, filed the suit against Chertoff on Wednesday in U.S. District Court in Brownsville, Texas.

(Writing by Ed Stoddard, editing by Mary Milliken and Stuart Grudgings)

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