(Updates with latest storm position)

By Oswaldo Rivas

MANAGUA, Oct 6 (Reuters) - New Orleans evacuated some residents from areas outside its levee system as Tropical Storm Nate swirled toward the U.S. Gulf Coast on Friday after killing at least 25 people in Central America.

Nate is set to become a Category 1 hurricane, the weakest on a five-category scale used by meteorologists, by the time it hits the U.S. central Gulf Coast on Saturday evening or Saturday night.

"Nate is at our doorstep or will be soon," New Orleans Mayor Mitch Landrieu said.

The greatest threat from this particular storm is not rain, but strong winds and storm surge, Landrieu said. The winds could cause significant power outages, and storm surges are projected to be six to nine feet (1.8 to 2.7 meters) high, he added.

"We have been through this many, many times. There is no need to panic," Landrieu told a news conference.

Later on Friday, the storm is expected to brush by Mexico's Yucatan peninsula, home to beach resorts such as Cancun and Playa del Carmen, before heading north into the Gulf of Mexico, according to the U.S. National Hurricane Center in Miami.

Nate was blowing maximum sustained winds of 70 miles per hour (113 kmh) and was about 500 miles (805 km) south-southeast of the Mississippi river on Friday evening, the NHC said.

In the United States, a state of emergency was declared for 29 Florida counties and states near Nate's path - Alabama, Louisiana and Mississippi - as well as the city of New Orleans, devastated by Hurricane Katrina in 2005.

The NHC issued a hurricane watch from Grand Isle, Louisiana to the Alabama/Florida border.

"By Saturday noon you should be in your safe place," Alabama Governor Kay Ivey told a news conference. "This is a fast-moving storm and we must begin preparing now."

Nearly three-quarters of U.S. Gulf of Mexico oil production was offline ahead of the storm, and more oil companies were halting operations late Friday.

On Friday evening, Nate was moving north-northwest at 22 miles per hour (35 kmh), a fast pace which if maintained could mean the storm does less damage when it hits land.

CENTRAL AMERICA DEATHS

The storm doused Central America with heavy rains on Thursday, killing at least 12 people in Nicaragua, nine in Costa Rica, two in Honduras and two in El Salvador, local authorities said.

Thousands were forced to evacuate their homes and Costa Rica's government declared a state of emergency.

Costa Rican President Luis Guillermo Solis urged residents to remain vigilant, noting rains would likely resume.

In Honduras, residents wondered whether they would have to flee. Norma Chavez and her two children anxiously watched a river rise outside their home in Tegucigalpa, the capital.