The United Nations (UN) warned yesterday of epidemics within days unless health systems in southern Asia can cope after more than 24,000 people were killed and hundreds of thousands left homeless by giant tsunami.

Aid agencies around the world rushed staff, equipment and money to southern Asia after huge waves, triggered by a massive underwater earthquake, pummelled and swamped coastal communities in at least six countries on Sunday.

"The longer term effects may be as devastating as... the tsunami itself," the UN's Emergency Relief Coordinator Jan Egeland told CNN.

"Many more people are now affected by polluted drinking water. We could have epidemics within a few days unless we get health systems up and running.

"Many people will have (had) their livelihoods, their whole future destroyed in a few seconds."

Sri Lanka, India and Indonesia suffered the highest death tolls but Thailand, Malaysia, Myanmar and Bangladesh were also hit by the surging walls of water.

Experts said the top five issues to be addressed were water, sanitation, food, shelter and health.

'Rotting bodies'

"We've had reports already from the south of India of bodies rotting where they have fallen and that will immediately affect the water supply especially for the most impoverished people," said Christian Aid emergency officer Dominic Nutt.

Some affected areas have had communications cut. Others are so remote it is impossible to know the extent of the damage.

"This is a massive humanitarian disaster and the communications are so bad we still don't know the full scale of it. Unless we get aid quickly to the people, many more could die," said Phil Esmond, head of Oxfam in Sri Lanka.

The Geneva-based International Federation of Red Cross and Red Crescent Societies said it was seeking an immediate US$6.5 million in emergency aid funds.

"This is a preliminary appeal. It will be revised after exact needs are evaluated," said Simon Missiri, head of the federation's Asia Pacific Department.

Earlier, the federation released US$870,000 from its disaster relief emergency funds to get assistance moving to the region.

"The biggest health challenges we face are the spread of waterborne diseases, particularly malaria and diarrhoea, as well as respiratory tract infections," said the Red Cross Federation's senior health officer Hakan Sandbladh.

The federation said it would send an assessment and co-ordinating team to Sri Lanka, and had on standby several emergency response units specialized in water and sanitation as well as field hospitals.

The United States said it would offer "all appropriate assistance" to Asian countries, with some aid already on its way to Sri Lanka and the Maldives. The European Union pledged an initial US$4 million and local news agency Belga said Belgium had allocated its own US$675,000 in emergency aid to be distributed by Red Cross bodies and the EU.

Britain said it had offered what it called practical help.

"What we don't know is the number of people who've been displaced, and what infrastructure has been affected. That's the critical point," said Titon Mitra, emergency response director for the CARE aid agency in Geneva.

Iranian President Mohammad Khatami yesterday sent his condolences to Asian countries struck by the tsunami. "I heard with sadness about the earthquake and floods that struck your country. I offer my deepest condolences to you, your nation and especially the victims' families," Khatami said.

Also yesterday, Japan sent a disaster relief team to Sri Lanka to provide aid and support to residents.

The 21-person delegation, which includes doctors, nurses and diplomats, took medical supplies and drinking water as well as tents to temporarily accommodate up to 1,000 people.

200 foreigners feared dead

Sri Lanka said yesterday it feared about 200 foreign tourists had been killed by the tsunami after the military raised the overall death toll to more than 10,000 people.

"We have received complaints of about 200 foreign tourists reported missing since yesterday (on Sunday). They are feared dead," Minister of Power and Energy Susil Premajayantha told a news conference.

However, while Sri Lanka's tourist board has put the toll at 70 tourists confirmed dead, Premajayantha said the government had so far identified only 19 dead tourists.

The dead included eight Japanese, four Germans and four Indians. A French tourist earlier said his granddaughter had been swept away to her death.

Economic cost

Compared to the huge death toll of the tsunami, the economic cost of the giant seismic waves will be much smaller.

Sri Lanka's economy will be hardest hit and Thailand's important tourism industry will have to pick itself up again after suffering setbacks from SARS (severe acute respiratory syndrome) and political unrest.

But overall, Asia's economies and markets are likely to suffer at most a glancing blow from the disaster.

"I do see some near-term impact from the unfortunate event but we're not about to cut growth rates in response to it," said Lian Chia Liang, an economist at JP Morgan Chase in Singapore.

Financial markets, though, only flinched. Some travel shares tumbled and the Thai stock exchange was down 1.6 per cent, but the Thai baht and Indonesian rupiah lost only a quarter of a per cent while the Bombay stock exchange actually rose 0.6 per cent.

"It will be more of a story of human tragedy rather than economic costs," said Song Seng Wun, an economist at brokerage GK Goh in Singapore.

Arjuna Mahendran, chief economist and strategist at Credit Suisse in Singapore, noted that Southeast Asia's bourses are dominated by property firms, banks and export-orientated manufacturers, which will be little affected by the catastrophe.

"I don't think you're going to have a major fall-out," he said.

But Mahendran, who used to head Sri Lanka's investment board, said the disaster would set back the island's economy by a year and might even result in negative growth next quarter.

Sri Lanka logged a record 500,642 tourist arrivals in 2003, boosted after a ceasefire the year before in a two-decade-old civil war pitting Tamil Tiger rebels and the government.

The government had been hoping to double those numbers by 2010. "That is a major blow because tourism was the fastest-growing component of the economy," Mahendran said.

In Thailand, where 12 million tourists a year generate about 6 per cent of the country's gross domestic product of about US$160 billion, Nuchjarin Kasemsukworarat with SCB Securities said the disaster would do more damage to confidence than to output.

"I would say sentiment is hurt very badly," Nuchjarin said.

But Anusorn Tammajai, an economist with BankThai, said tourism was unlikely to suffer as much from the tsunami as it did from last year's outbreak of SARS, when the number of arrivals dropped 7.4 per cent, or from this year's burst of political violence in the south of the country.

"It will have a severe impact on tourism, but it will be a one-off impact," Anusorn said.

India's main beach attractions, Kerala and Goa, are on its west coast and escaped the tsunami. Madras and Andhra Pradesh on the east coast were hit hard but are not big beach destinations.

"I don't see any significant impact on tourist inflows," said Subhash Goyal, president of the Indian tour operators' association.

Economists agreed the disaster would hit government finances harder than the ecomomy. "The quake will not hurt sentiment on the economy as damage is localised and areas where growth is happening are protected," said Dhananjay Sinha with ICICI Bank.

Indonesia also put a brave face on the financial cost of the calamity.

The government would be able to finance any increase in its budget deficit made necessary by the tsunami, which devastated parts of Aceh province, said Mulia Nasution, a senior Finance Ministry official.