By Caroline Copley

MOEDLAREUTH, Germany (Reuters Life!) - A tiny village of 50 residents straddling the former border dividing East and West Germany and nicknamed "Little Berlin" has preserved its own 100-meter section of the Iron Curtain -- for tourists.

For more than 38 years Moedlareuth belonged to two different countries and ideological systems. The 2.5 meter (eight foot) high Wall, similar to the famous Berlin Wall, remains a fixture in the village center even 20 years after Communism collapsed.

Nowadays the farming hamlet that lies some 300 km (186 miles) south of Berlin has become a prime destination for tourists searching for the remnants of the Communist era when East and West Germany were divided.

"Visitors can come here to get a real glimpse of what it was like to live here with the Wall running through the middle of the village," said Robert Lebegern, director of the Deutsch-Deutsches Museum in the heart of Moedlareuth.

For four decades the villagers of Moedlareuth were divided by the Iron Curtain. Half of the village was in the old German kingdom of Bavaria, the other part lay in the eastern state of Thuringia. It was one bizarre aspect of the country's division.

A neighborly cup of tea is now a mere matter of a few steps, but traces of the old division still persist: there are two different post codes, two dialing codes and two different school systems.

Those living in the former East greet each other with "Guten Tag" (good day) while their neighbors from the heavily Roman Catholic state of Bavaria tend to use the traditional greeting "Gruess Gott!," literally translated as "Greet God!."

In addition to the original segment of Wall -- which looks like a compact version of its big brother in Berlin -- the old border posts, watch towers and barbed-wire fencing still stand in their original positions.

The occasional barking dog -- an eerie echo of the past border control -- interrupts the droning of a tractor in the nearby fields. But gone are the armed guards who once surveyed residents. Instead snap-happy tourists arrive by the busload.

The inhabitants of sleepy Moedlareuth have grown used to the constant influx of visitors who shuffle to the museum to watch a 20-minute film documenting the peculiar split reality that became normality for nearly four decades.

NO WAVING

More than 60,000 visitors came to Moedlareuth in 2008 and the museum expects a similar number to make the trek to the isolated village this year as the 20th anniversary of the Wall falling approaches.

"It feels very frozen in time," said Huw Diprose, 20, a student of International Politics at Aberystwyth University in Wales, who was on a walk along the former Iron Curtain.

"I was barely a year old when the wall fell. I wanted to come here to get into the mindset of what it was like back then."

East Germany started to fence itself off from the West in 1952 -- a border that for centuries had been administrative then divided families, friends and neighbors. East Germany built the Berlin Wall in 1961 and at the same time in Moedlareuth.

Even neighborly greetings were outlawed.

"We could wave to our friends on the other side of the wall, but they weren't allowed to acknowledge us back," said Karin Mergner, a 62-year-old farmer living in western Moedlareuth.

When the Wall finally cracked open in 1989, eastern Moedlareuth was overwhelmed by the sudden media attention. Residents quickly became resentful of visitor stereotypes of backwardness and reports of bitter East-West division.

It took a while for the small town to reunite. Four weeks after the Berlin Wall was opened on November 9, 1989, a direct border opening was finally made in Moedlareuth on December 9 1989 but everyone was still required to present their passports.

It wasn't until six months later, on June 17, that people were allowed to cross the border in "Little Berlin" freely, after the mayor on the Bavarian side, Arnold Friedrich, knocked down larger chunks of the Wall with a digger.

"It was a great moment of celebration," said Lebegern, director of the museum. "But afterwards some East Germans complained that he had damaged East German property."

(Editing by Paul Casciato)