Most of the highway, built by the military in 1973 as part of a strategic plan to integrate the world's biggest rainforest into the national economy, is a dirt track which dissolves into a sea of mud during the tropical rains.

Mato Grosso is Brazil's biggest soy-producing state and its farmers anticipate that paving the road will lead to an export boom. An all-weather road would cut the travel time by truck to Cargill Inc.'s export terminal at Santarem to about 3-1/2 hours from nine hours. From Santarem, their product travels by ship to global customers.

The government of President Luis Inacio Lula da Silva -- which decided recently to embark on the paving project -- plans in October to issue a tender for asphalt and begin the three-year road work after next year's rainy season ends in June.

But environmentalists fear that paving the road will speed the destruction of the Amazon rainforest by squatters, ranchers, loggers and soy farmers. About 70 percent of deforestation occurs 30 miles (50 km) either side of main roads, IPAM said.

Many settlers, drawn to the region by government offers of land and cash 30 years ago, feel trapped in the rainforest and are impatient for paving to begin. Promised hospitals, schools and roads have not been built.

"We've suffered for 30 years. We've a right to a better life," said Altair Pedro Martini, president of the Rural Workers' Union in Ruropolis, a bone-shaking 135 miles (220 km) south of Santarem on the BR 163.

It would also open a northern export corridor for soy, Brazil's main farm export, and ease pressure on congested southern ports. Soy exports were worth $10 billion in 2004 and Brazil may soon overtake the United States as the world's No.1 exporter.

FORGOTTEN PEOPLE

About half the roughly 20 million people in the Amazon region live below the poverty line, according to the Amazon Environmental Research Institute (IPAM).

Some activists fear the paving project will increase violence, prostitution and disease as a wave of new settlers fight for land. They also predict social inequality will grow worse as small farmers are forced out.

Despite these dangers, locals see better times ahead.

"I came here 24 years ago and have been dreaming about a paved road ever since," said 48-year-old farmer Jose Ferreira Carvalho in a roadside hamlet. "It will make it easier to reach a doctor, improve the quality of life."

Ambulance driver Dimas Vieira da Silva said that the journey from Ruropolis to Santarem takes around five hours.

"A boy died recently from a snake bite before we reached a doctor in Santarem," he said, taking a break on the way back to Ruropolis after taking a woman in a coma to hospital.

Bus driver Antonio Mendes said the road is a nightmare.

"Sometimes passengers have to get off the bus and walk for 3 km (nearly 2 miles) with their bags through the mud to another bus on the other side of the blockage," he said.

PROTECTION VERSUS PRODUCTION

Politicians see the road opening new horizons.

"Paving the road will end Santarem's isolation," said Maria do Carmo Martins, the town's mayor and a member of the ruling Workers Party. "But it will attract a lot of people."

"The plan will help fill a black hole of government neglect," said Renato Dantas, president of Santarem Commercial Association. "It will increase pressure on land but boost tourism and crop farming."

Johaness Eck, coordinator of a ministerial working group of 21 government departments, said a priority was to increase public security in the wild frontier region by sending more police and soldiers.

Economic benefits are clear, said the Transport Ministry's BR 163 technical coordinator Jose Maria da Cunha, adding that the project would cut transport costs by about one-third and halve the trip from Manaus, capital of Amazon state, to Sao Paulo to five days.

PLAN RUSHED, LACKS RESOURCES

But environmentalists were concerned that the government, pressured by soy farmers, was pushing ahead with the project before fully analyzing the social and environmental impact.

"The government is under pressure to help local people," said Socorro Pena at IPAM's Santarem office.