Hurricane Katrina has killed up to 55 people on the US Gulf coast and swamped much of New Orleans, according to reports coming out of disaster areas.
The Mississippi coastal towns of Biloxi and Gulfport bore the brunt of the storm as it span over from New Orleans in Louisiana before heading inland.
As dawn broke, Biloxi was largely cut off from the outside world.
Thirty people died at a beachfront apartment complex in the town, said an emergency official in Harrison County.
Large parts of the town may have been destroyed and, according to an internet posting by the mayor, roads are impassable and telephone lines down.
Biloxi resident Harvey Jackson told an ABC reporter he had lost his wife, Tonette, when their house split in two.
"We got up the roof and the water came..." he said, weeping.
"I held her hand tight as I could and she told me 'You can't hold me'. She said 'Take care of the kids and the grandkids.'"
Damage estimates suggest it could be the US insurance industry's most expensive natural disaster ever.
Early estimates from the insurance industry suggest that it will cost more than $25 billion to repair the damage caused by the hurricane.
Forecasters have warned of heavy rain as the storm heads north towards Tennessee and Ohio. Tornado warnings are in force in some areas.
Mississippi Governor Haley Barbour told reporters the county's death toll was likely to rise as rescuers reached cut-off areas.
"We know that there is a lot of the coast that we have not been able to get to," he said.
"I hate to say it but it looks like it is a very bad disaster in terms of human life."
Three people were also killed by falling trees in the state, and in Alabama two people died in a road accident.
The hurricane brought 105mph (170km/h) winds to Mississippi, where Governor Barbour told reporters it came in "like a ton of bricks".
Katrina was later downgraded to a tropical storm as it passed through the eastern part of the state, with wind speeds of 60mph (97km/h).
The storm swept ashore on Monday after moving across the Gulf of Mexico.
At least two oil rigs were set adrift. One in Mobile Bay, Alabama, broke free of its moorings and struck a bridge.
About 80% of New Orleans was under flood water, Mayor Ray Nagin said, although the historic French Quarter escaped major damage.
The mayor told a local TV station that bodies had been spotted floating in the water.
"I don't have any good news to really share," he said. "The city... is in a state of devastation."
More than a million people were evacuated from the New Orleans area as the hurricane approached.
Flood waters surged across the western part of the city after a vital flood defence gave way but the storm weakened after making landfall, sparing New Orleans a direct hit.