Hundreds feared dead in US Hurricane Katrina

The economic cost of the hurricane’s rampage could be the highest in US history, according to damage estimates.

"The devastation is greater than our worst fears," Louisiana Governor Kathleen Blanco told a news conference. "It’s totally overwhelming."

She spoke after an overnight breach in New Orleans’ protective levee system allowed water from Lake Pontchartrain to flood most of the city.

In the Mississippi coastal city of Biloxi, hundreds may have been killed after being trapped in their homes when a 30-foot storm surge came ashore, a city spokesman said.

"It’s going to be in the hundreds," spokesman Vincent Creel told Reuters. "Camille was 200, and we’re looking at a lot more than that," he said, referring to Hurricane Camille which hit the area in 1969 and destroyed swaths of Mississippi and Louisiana, killing a total of 256 people.

New Orleans Mayor Ray Nagin reported bodies floating in the city’s floodwaters.

Rescuers struggled through high water and mountains of debris to reach areas devastated by Katrina when it struck the Gulf Coast region on Monday.

The storm inflicted catastrophic damage all along the coast as it slammed into Louisiana with 140 mph winds, then swept across Mississippi, Alabama and Tennessee. It shattered buildings, broke boats, smashed cars, toppled trees and flooded cities. Risk analysts estimated the storm would cost insurers US$26 billion, making Katrina potentially the costliest US natural disaster.

Most of the deaths appear to have been caused by the storm surge, which swept as far as a mile inland in parts of Mississippi. Hundreds of people climbed onto rooftops to escape the rising water and waited to be rescued. Others may have been trapped in attics. In New Orleans, "We probably have 80 percent of our city under water, with some sections of our city the water is as deep as 20 feet," Nagin told television station WWL. "Both airports are under water."

New Orleans is a bowl-like city mostly below sea level and protected by levees or embankments. The levees gave way overnight in places, including a 200-foot breach that allowed the lake waters to pour into the city centre.

Pumps failed and floodwaters threatened downtown and the historic French Quarter.

"We always were afraid the bowl that is New Orleans would fill quickly," Walter Maestri, emergency management coordinator for Jefferson Parish, said in a radio interview. "Now with the water rising today, it appears to be filling slowly."

Tulane University Medical Centre vice president Karen Troyer-Caraway told CNN the downtown hospital was surrounded by six feet of water and was considering evacuating its 1,000 patients.

"The water is rising so fast I cannot begin to describe how quickly it’s rising," she said. "We have whitecaps on Canal Street, the water is moving so fast."

The storm had swept through oil and gas fields in the Gulf of Mexico, where 20 percent of the nation’s energy is produced.

At least two drilling rigs were knocked adrift and one in Mobile Bay, Alabama, broke free of its mooring and slammed into a bridge. US oil prices on Tuesday jumped US$3.65 a barrel to peak at US$70.85 as oil firms assessed damage.