A girl in Louisiana rescues a dog on August 29.-Xinhua

Hurricane Katrina, upgraded to a category five storm moving toward New Orleans, is likely to cause catastrophic damage.

Officials in the low-lying city famed for its Mardi Gras parades urged residents to evacuate and stranded tourists to shelter on at least the third floor of their hotels as Katrina threatened to make a second and possibly more deadly assault on the U.S. coast after killing seven people in Florida.

"Ladies and gentlemen, this is not a test. This is the real deal," New Orleans Mayor C. Ray Nagin said at a news conference. "Board up your homes, make sure you have enough medicine, make sure the car has enough gas. Do all things you normally do for a hurricane but treat this one differently because it is pointed towards New Orleans."

Katrina grew into a Category 5 hurricane on the five-step Saffir-Simpson scale by 7:05 a.m. EDT (1105 GMT), with winds of 160 mph (260 kph) capable of causing catastrophic damage. The storm was around 250 miles south-southeast of the mouth of the Mississippi River.

Computer models showed that New Orleans, much of which lies below sea level, could be in the storm's bull's eye.

Risk modeling companies have said early estimates of insured damage range from $600 million to $2 billion.

Katrina is the 11th named storm of the Atlantic hurricane season, which began June 1. That's seven more than typically have formed by now in the Atlantic, Caribbean and Gulf of Mexico, the hurricane center said. The season ends Nov. 30.