Mayor Ray Nagin warned the hurricane's storm surge of up to 28 feet (8.5 metres) could topple levees and flood the city's historic French Quarter when it makes a second, and more powerful, assault on US shores after killing seven people in Florida on Thursday.

"Ladies and gentlemen, I wish I had better news for you but we are facing a storm that most of us have feared," Nagin told a news conference after reading out a mandatory evacuation order. "This is a threat that we've never faced before."

In the French Quarter, shopkeepers sandbagged art galleries and boarded up bars and restaurants in preparation for the storm. Police and fire officials took to the streets with bullhorns, alerting residents of the coming danger.

Those who could not join the exodus were advised to head to about a dozen shelters in the city, one of which is the Louisiana Superdome, home to the National Football League's New Orleans Saints.

Max Mayfield, director of the US National Hurricane Center, described Katrina as a "perfect" hurricane. It had grown into a Category 5 hurricane on the five-step Saffir-Simpson, with winds near 165 mph (270 kph) just before 5 p.m. EDT (2100 GMT) on Sunday, the Miami-based US National Hurricane Center said.

Katrina was about 150 miles (246 km) south of the mouth of the Mississippi River and heading northwest at 13 mph (21 kph). Hurricane force winds could be felt 105 miles (170 km) out from the center.

Katrina had a central pressure -- a measure of a storm's intensity -- of 902 millibars, which would make it one of the four strongest storms on record. The Labor Day hurricane of 1935 that hit the Florida Keys, killing some 600 people, was the strongest with a minimum central pressure of 892 millibars on landfall.

"The lower the pressure, the stronger the winds and that is exactly what is happening here with Katrina," Mayfield told CNN.

15 INCHES OF RAIN POSSIBLE

The hurricane center warned of destructive winds along the Gulf Coast from the Florida-Alabama border, through Mississippi and west into Louisiana, and said Katrina could bring up to 15 inches (38 cm) of rain.

Its track would take it through key US oil and gas areas in the Gulf of Mexico, and Katrina seemed likely to affect already sky-high gasoline prices. Oil rigs were evacuated and casinos along Mississippi's coast were closed.

It also endangers the port serving New Orleans, one of the most important in the world, and could do billions in damage to the city's tourism infrastructure.

Tourists on the Gulf Coast scrambled to join the mass exodus but many were left trapped as rental cars were snapped up quickly. Authorities in New Orleans said they would commandeer vehicles and private buildings if necessary.

"About all you can do at this point is pack the car with as much as you can carry, place the rest of your belongings as high in the house as you can and then get the heck out of here," said Cathe Jackson, whose house is one block from the water in Biloxi, a casino-resort town on Mississippi's coast.

US President George W. Bush declared an emergency in Louisiana and Mississippi and a major disaster in Florida, measures that allow federal aid to be deployed.

"We will do everything in our power to help the people and communities affected by this storm," Bush said from his ranch in Crawford, Texas. "We cannot stress enough the danger this hurricane poses to Gulf Coast communities."