A child is rescued from flood in New Orleans on August 30.-Xinhua/AFP

Hundreds might have been killed, tens of thousands were homeless and flood submerged most of New Orleans on Tuesday after monstrous Hurricane Katrina rampaged across the US Gulf Coast.

As US President George W. Bush declared major disaster areas in Mississippi, Louisiana and Alabama, low-lying New Orleans faced catastrophic destruction, with floodwaters pouring into the city through levees breached by the storm.

There were instances of looting in several areas of New Orleans and the authorities imposed martial law in at least two parishes in a bid to maintain law and order.

"Our city is in a state of devastation," Mayor Ray Nagin was quoted as saying by WWL-TV. "With some sections of our city, the water is as deep as 20 feet (seven metres). It's almost like a nightmare that I hope we wake up from."

Kathleen Blanco, the Governor of Louisiana, said last night that thousands of people had been rescued from the rooftops of New Orleans, and state officials were planning to move to safety the estimated 55,000 people still trapped in the Superdome and other shelters.

"The dimensions are unfathomable," Blanco said. She advised residents to hold a day of prayer on Wednesday to "calm our spirits" and give thanks for survival.

"The devastation is greater than our worst fears," she said. "It is just totally overwhelming."

In the Mississippi coastal city of Biloxi, hundreds may have died after being trapped in their homes when a 30-foot (9 metre) storm surge came ashore, a city spokesman said. Cadaver dogs were being brought in to help find the dead.

"It's going to be in the hundreds," spokesman Vincent Creel was quoted as saying by Reuters. Mississippi Gov. Haley Barbour had said there were reports of up to 80 dead in the Biloxi area, but US Homeland Security Secretary Michael Chertoff said the state's unofficial estimates were "probably way too low."

Rescuers struggled through high water and mountains of debris to reach areas crushed by Katrina when it struck the Gulf Coast on Monday. The storm inflicted catastrophic damage as it slammed into Louisiana with 140 mph (224 kph) winds, then raged into Mississippi, Alabama and Tennessee.

More than 1.3 million people in these areas were without power. The authorities said that it could be two months before electricity is restored to everyone who had been hit.

"The federal, state and local governments are working side by side to do all we can to help people get back on their feet," Bush said at a naval base in San Diego, California. "And we have got a lot of work to do."

Estimates by insurers put the property and casualty costs of Katrina at anything up to $26 billion, which would make it more expensive than the previous record storm, Hurricane Andrew, which caused $21 billion in insured losses in 1992.