At first everyone seemed to breathe a sigh of relief as the powerful hurricane narrowly missed New Orleans, but unfortunately the worst was yet to come. The city of 480,000 is mostly below sea level and it has suffered catastrophic flooding after two key levees broke, letting in water from the polluted Lake Pontchartrain. Some districts are under 20 feet of water and the city's mayor has estimated up to 80 percent of the Cajun city is flooded. Those residents who did not heed calls to evacuate the city were now essentially cut off from the outside world as bridges were washed out and roads and the airport were all underwater.

"We were good until the canal busted," local resident Gregory Sontag told the New Orleans Times-Picayune. "First there was water on the street, then the sidewalk, then water in the house." The newspaper has managed to continue publishing online  despite having to abandon its offices as the floodwaters continued to rise.

CNN reported city officials had not yet even begun to calculate the death toll caused by "Katrina"  -- the focus is currently still on rescue operations rather than recovering bodies. Among those awaiting rescue are the 10,000 people holed up in the Superdome, which is reportedly filled with knee-deep water. With power outages throughout the city and food and water supplies disappearing, conditions are likely to deteriorate and the city is threatened with an environmental and public health catastrophe. "There are dead bodies floating in some of the water," New Orleans Mayor Rag Nagin said. "The rescuers would basically push them aside as they were trying to save individuals."

Widespread looting

The specter of growing unrest  is also looming after widespread looting broke out. National Guard troops were moved into the downtown business district, and state police squads backed by SWAT teams were sent in to scatter looters and restore order. One New Orleans police officer has been shot and is reported to be in critical condition. Describing the looting to the Los Angeles Times, one tourist said , "It's like downtown Baghdad."

Some officials are saying the city could be uninhabitable for at least a few weeks and possibly much, much longer. But Katrina left a wake of destruction over an area far greater than just New Orleans . As the hurricane slammed into the Gulf coast, it also battered large parts of Louisiana, Mississippi and Alabama . Initial damage estimates top $25 billion , according to Bloomberg News.

In Mississippi , the official death toll reached 100 and was expected to climb. "I can only imagine that this is what Hiroshima looked like 60 years ago," said Gov. Haley Barbour, describing parts of his state after surveying it from the air.

The scale of the natural disaster has led US President George Bush to cut short his summer vacation in order to focus on the wide-reaching effects of storm, including on the rising price of oil. USA Today reported that energy prices  had spiked after it appeared Katrina would "reverberate" throughout the US economy as ports on the Gulf of Mexico were unable to ship petroleum products.

"We can now describe this as a fuel crisis, and specifically in regard to gasoline," Tom Kloza, a senior analyst at the Oil Price Information Service, told the paper. "We are no longer dealing with anything resembling stability in the supply sector."

At least 575 dead in Baghdad Stampede

More than 600 Iraqi Shiites were feared dead on Wednesday after a stampede broke out on a bridge over the Tigris River in Baghdad. A crowd of thousands apparently became panicked after rumors spread that a suicide bomber was in their midst. The elderly or weak were rapidly trampled under hundreds of desperate feet. Iron railings on the Aima Bridge also gave way sending scores to their deaths in the river below.

Police and hospital sources have said at least 575 people died in the stampede or drowned in the river. Bodies are still being taken out of the murky waters. An Interior Ministry source told Reuters news agency that the total could be much higher. "Now it's 640," the source said, and there are fears that there are many more bodies still to be counted.

The crowd had gathered to celebrate the saint's day of Musa al Kadhim, a Shiite martyr. They were making their way to the Kadhimiya mosque, in northern Baghdad when joy suddenly turned to fear and outright panic.

A police source told Reuters that someone shouted that there was a suicide bomber on the bridge. "Hundreds of people started running and some threw themselves off the bridge into the river. Many elderly died immediately as a result of the stampede but dozens drowned, many bodies are still in the river and boats are working on picking them out."

Tensions had been running high all day after three mortar attacks had struck the crowd, killing seven people. Around 1 million people had gathered near the Imam Musa al Kadim shrine to commemorate the Shiite saint's death. There were fears that such a large crowd of Shiites could attract suicide attacks.