Rain started to fall along the Gulf Coast as Hurricane Dolly closed in on towns straddling the Texas-Mexico border, packing 85 mph winds that could strengthen when it hits land later Wednesday.

The Category 1 hurricane was expected to dump up to 15 inches of rain, threatening flooding that could breach levees in the heavily populated Rio Grande valley.

Dolly was upgraded from a tropical storm Tuesday afternoon, and sustained winds have strengthened to about 85 mph. At 7 a.m. EDT Wednesday, the storm's center was about 55 miles east of Brownsville, moving northwest at about 8 mph.

The National Hurricane Center said Dolly could approach Category 2 strength, meaning wind speeds of at least 96 mph, when it reaches the coastline later Wednesday.

Click to view live Doppler radar of the storm

Click for more from MyFoxHouston.com | FOX Tropical Tracker

A hurricane warning was in effect for the coast of Texas from Brownsville to Corpus Christi and in Mexico from Rio San Fernando northward.

Cities and counties in Rio Grande valley were preparing Tuesday night as officials feared heavy rains could cause massive flooding and levee breaks.

Click to view photos of Dolly and affected Texas residents

Click for the latest maps and information from the National Hurricane Center

Texas officials urged residents to move away from the Rio Grande levees because if Dolly continues to follow the same path as 1967's Hurricane Beulah, "the levees are not going to hold that much water," said Cameron County Emergency Management Coordinator Johnny Cavazos.

There was intermittent light rain late Tuesday in Brownsville, and Cavazos said he expected outer bands to move over the area overnight. Charles Hoskins, deputy emergency management officer for Cameron County, said there were nearly 2,000 people in six shelters in the county.

In Hidalgo County, a little bit farther inland, eight shelters holding about 900 were open, said Cari Lambrecht, a county spokeswoman. She said people living in low-lying areas were encouraged to come to shelters.

"It's so much easier for them to go now instead of us having to pull them out later," she said.

Late Tuesday, the causeway linking the mainland to South Padre Island was closed as winds ramped up, said Dan Quandt, a spokesman for the town's emergency operations. He said no one would be allowed onto or off of the island, with the causeway not likely to open again until Wednesday evening at the earliest. He said winds were not predicted to reach speeds requiring evacuation.

In Mexico, Tamaulipas Gov. Eugenio Hernandez said officials planned to evacuate 23,000 people to government shelters in Matamoros, Soto La Marina and San Fernando.

People began trickling in Tuesday night to five shelters set up throughout the border city of Matamoros. City officials said three other shelters were ready in case they were needed.

Forecasters predicted Dolly would dump up to 15 inches of rain and bring coastal storm surge flooding of 4 to 6 feet above normal high tide levels. Forecasters said Dolly's eye should hit the coast around midday Wednesday.

The U.S. Census Bureau said that based on Dolly's projected path, about 1.5 million Texans could feel the storm's effects.

Tropical storm warnings were issued for areas adjacent to the hurricane zone, and Gov. Rick Perry declared 14 south Texas counties disaster areas, allowing state resources to be used to send equipment and emergency workers to areas in the storm's path.

Mike Castillo, a meteorologist with the National Weather Service in Brownsville, said conditions were favorable for tornadoes Wednesday morning, especially in deep south Texas and the adjacent coastal waters. A tornado watch was in effect for several counties in the area until 10 a.m. CDT Wednesday.

The storm, combined with levees that have deteriorated in the 41 years since Beulah swept up the Rio Grande, pose a major flooding threat to low-lying counties along the border. Beulah spawned more than 100 tornadoes across Texas and dumped 36 inches of rain in some parts of south Texas, killing 58 people and causing more than $1 billion damage.

"We could have a triple-decker problem here," Cavazos told a meeting of more than 100 county and local officials Tuesday. "We believe that those (levees) will be breached if it continues on the same track. So please stay away from those levees."

Around Brownsville, levees protect the historic downtown as well as preserved buildings that were formerly part of Fort Brown on the University of Texas at Brownsville campus. Outside the city, agricultural land dominates the banks of the Rio Grande, but thousands of people live in low-lying colonias, often poor subdivisions built without water and sewer utilities.

The International Boundary and Water Commission, which operates a series of levees, dams and floodways in the lower Rio Grande Valley, put its personnel on standby alert. If needed, the IBWC will begin patrolling the levees around the clock looking for seepage and erosion, said spokeswoman Sally Spener.

The IBWC made significant improvements to the levee system after Beulah and its studies showed that a 100-year flood in Cameron County would not top the levees, Spener said. Levees upstream in Hidalgo County are in the midst of improvements, but the river could spill over sections in a 100-year flood, a flood so big that it has only a 1 percent chance of happening in any given year.

Much of the damage to New Orleans from Hurricane Katrina was from levee breaks instead of wind.

Lines grew Tuesday at centers giving out sandbags in the Rio Grande Valley.

The Navy began flying 104 of its aircraft out of Naval Air Station Corpus Christi to bases inland. Other aircraft will be sheltered on base in hangars and no evacuation was planned.

Maj. Jose Rivera of the Texas Army National Guard said troops were preparing at armories in Houston, Austin and San Antonio, after Gov. Perry called up 1,200 Guard members to help.

Immigration and Customs Enforcement was evacuating its Port Isabel Detention Center, said spokeswoman Nina Pruneda. Fewer than 1,000 people were being sent to other detention centers in Texas.

In the Gulf of Mexico, Shell Oil evacuated workers from oil rigs, but said it didn't expect production to be affected. It also secured wells and shut down production in the Rio Grande Valley, where it primarily deals in natural gas.

Mexico's state-run oil company, Petroleos Mexicanos, said it had evacuated 66 workers from an oil platform off the coast of the port city of Tampico. Pemex said in a statement that it had readied a team and the resources needed in case of damage to oil installations in the region.

Residents of northern Mexico were taking the impending storm in stride.

Blas Garica, a 62-year-old builder in Reynosa, was taping up his windows and putting sandbags in front of his porch to prepare.

"I'm not afraid because we flood frequently around here," he said. "If my house floods, we'll just run to the roof."