* New wall is in active smuggling area
* Limited extent of wall leads to doubts
* Turkey faces Syrian-related security risks
By Dasha Afanasieva
REYHANLI, Turkey, May 5 (Reuters) - Turkey has started building a new wall along a fragment of its southeastern border with Syria as it struggles against smuggling, illegal migration and the threat from al Qaeda fighters among Syria's rebel ranks.
Slabs of concrete have sprung up in recent days, snaking for just over one kilometre over the rolling hills of Hatay province, a finger of land which was part of Syria until the late 1930s, dotted with villages that have thrived on an illicit cross-border trade in everything from fuel to cigarettes.
Turkey has kept an open-border policy throughout Syria's three-year civil war and has vowed to maintain it, providing a lifeline to rebels battling President Bashar al-Assad by allowing supplies in and refugees out.
But the policy has had its costs. Smuggling has thrived, and a growing number of Syrians forced by the war to eke out a living where they can, swell the ranks of those trying to cross back and forth outside the official border posts.
That has compounded the challenge of securing the 900-km (560-mile) border for Turkey's authorities, already accused of doing too little to stop foreign jihadists from entering Syria and posing an even bigger risk to the wider region.
Car bombs in the Turkish town of Reyhanli killed dozens almost a year ago and there has been more violence since then. The International Crisis Group estimates that more than 75 Turkish citizens have been killed in fighting that has spilled over the frontier.
"Turks are reminded of the security risks by deadly car bombs and armed incidents on their territory, especially as northern Syria remains an unpredictable no-man's land," the think-tank said in a report.
"The conflict was not of its making, but Ankara has in effect become a party," it said.
Turkey's handling of the Syrian war was said to be the main reason that led to the ruling AK Party's loss of Hatay province in March's local elections. The costs the crisis has imposed on the economy in border areas and fears about Islamist fighters have also alarmed local people.
In the face of such a challenge, the wall seems a symbolic gesture, starting in a village called Kusakli, which an official from the district governorate called an active spot for border trespassing, and following the contours for just a over a kilometre.
A local customs official said it would be extended to 8 kilometres, although he added: "The total border is 900 kilometres so we're not sure about the effectiveness of the wall."
Local officials did not know how much the wall was costing and said the Turkish armed forces were behind the project, but the military did not comment immediately.
Local people doubted the barrier would do much more than deter a few opportunist smugglers, while punishing legitimate refugees.
"The big smugglers can't be stopped, they have special arrangements," said one middle-aged man in the border village of Bukulmez, who did not want to be named after confessing to having helped bring refugees over the border illegally.
His 30-year-old son had also joined a smuggling gang but was caught, and had spent the last 20 months in detention awaiting trial, he said, sitting on the porch of his crumbling home.
His teenage daughter, who hopes to go to university, said smugglers from the village used to transport a range of goods, even guns, but the trade had moved further along the border after a crackdown by the security forces.
"Even a bird can't pass," she said, looking towards Syria.
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It is a lucrative business. Sugar sells for about 50 U.S. cents a kilogram in Syria where it is produced but more than double that in Turkey, those involved in the trade say.
Fuel is heavily taxed in Turkey, meaning the black market for illegal gasoline imports from Syria, however crudely refined in makeshift facilities, is thriving, with cash flowing back to rebel-held areas in exchange.
"Some people farm, but there's little else," said Guven Koseoglu, councillor in the nearby village of Beshaslan, declining to use the term smuggling but acknowledging that goods crossing the border were neither taxed nor officially imported.
Hundreds of blue plastic jerry cans are stacked up against walls in the village, a heavy stench of diesel in the air. Gendarmes man checkpoints looking out towards Syria, while two armoured personnel carriers stand at the ready.
Turkey started building a similar wall along a fraction of its border further east last October at Nusaybin, a district 10 km (6 miles) north of the Syrian town of Qamishli, where Kurds, rebel units and Arab tribes regularly clashed.
But such efforts are drops in the ocean for a country now sheltering more than 700,000 refugees, at least half a million of them outside the camps it began building in mid-2011, little knowing the war would last so long and bring such vast numbers.
"One problem is the 100,000-200,000 Syrian refugees whom Turkey is keeping on the other side of the Syrian border," said the International Crisis Group's Turkey expert, Hugh Pope.
"They still need supplies, or better, shelter inside Turkey, but for this the world needs to do much more in Turkey's support," he said.
Prime Minister Tayyip Erdogan said last week Turkey had spent $3.5 billion providing food, shelter and education but had received just $150 million in assistance from other countries.
"There are lots of people who are internally displaced, millions, and there's almost 200,000 who have died. To do nothing and watch is unacceptable," he said in an interview with PBS talk show host Charlie Rose.
"Where is the United Nations, where is the United States? Where are all these countries?" he said.
It is not just smugglers and fighters who try to cross the border avoiding the official checkpoints.
At one end of the new wall near Kusakli, a Syrian farmer in a long kaftan said he used to pay 1,000 Syrian pounds ($6.75) for passage back to Syria. But with security tighter, costs have risen. Now the going rate is 5,000 Syrian pounds via the border village of Hacipasa, a more complicated route involving a change in vehicles.
"I have to travel back sometimes," he said, explaining he had to leave his wife and ten children from time to time, to return to tend to his animals near the Syrian city of Hama. ($1 = 148.2500 Syrian Pounds) (Additional reporting by Ozge Ozbilgin and Tulay Karadeniz in Ankara; Editing by Nick Tattersall and Giles Elgood)