BEAUMONT, Texas (AP) – Hurricane Rita steamed toward refinery towns along the Texas-Louisiana coast with 125 mph (200-kilometer) winds yesterday, creating havoc even before it arrived.

Levee breaks caused new flooding in New Orleans, and as many as 24 people were killed when a bus carrying nursing-home evacuees caught fire in a traffic jam.

Rita weakened during the day into a Category 3 hurricane after raging as a Category 5, 175-mph (280-kilometre) monster earlier in the week. But it was still a highly dangerous storm.

The hurricane is expected to come ashore early today on a course that could spare Houston and Galveston but slam the oil refining towns of Beaumont and Port Arthur, Texas, and Lake Charles, Louisiana, with a 20-foot (6-metre) storm surge, towering waves and up to 25 inches (63 centimetres) of rain.

“We’re going to get through this,” Texas Gov Rick Perry said. “Be calm, be strong, say a prayer for Texas.”

Rita threatened dozens of refineries and chemical plants along the Texas and Louisiana Gulf Coast that represent a quarter of the nation’s oil refining capacity. Environmentalists warned of the risk of a toxic spill, and business analysts said Rita could cause already-high gasoline prices to rise to as much as $4.00 (euro3.3) a gallon.

In New Orleans, which had just drained nearly all the putrid floodwaters from Katrina, Rita’s wind and rain sent water gushing through a patched levee along the Industrial Canal and into the already-devastated Lower Ninth Ward and parts of neighbouring St Bernard Parish. The water rose to waist level.

About the same time, water streamed through another levee along the patched London Avenue Canal, swamping homes in the Gentilly neighbourhood with six to eight inches (15 to 20 centimetres of water).

“Our worst fears came true,” said Maj Barry Guidry, a National Guardsman on duty at the broken levee in the Ninth Ward.

Refugees from the misery-stricken neighbourhood learned of the crisis with despair.

“It’s like looking at a murder,” Quentrell Jefferson said as he watched the news at a church in Lafayette, 125 miles (200 kilometres) west of New Orleans. “The first time is bad. After that, you numb up.”

At least 2.8 million people fled a 500-mile (800-kilometre) stretch of the Louisiana-Texas coastline in a seemingly all-at-once evacuation that caused monumental traffic jams in which hundreds of cars broke down or ran out of gas. Traffic was still bumper-to-bumper yesterday from the outskirts of Houston toward Austin and Dallas.

In a traffic jam on Interstate 45 near Wilmer, southeast of Dallas, a bus caught fire, killing as many as 24 people. Early indications were that mechanical problems caused the fire, and then passengers’ oxygen tanks started exploding in rapid succession.

The military sent cargo planes to evacuate hundreds of medical patients and others from Beaumont. Downtown Beaumont was all but deserted, with buildings boarded up and practically nothing moving but windblown plastic bags. On the horizon, covered in gray clouds, refinery torches belched black smoke.

About 90 per cent of Galveston’s 58,000 residents had cleared out, with the rest left to the mercy of a 17-foot (5.2-metre) seawall that was built after a 1900 hurricane that killed 6,000 to 12,000 of the island’s residents in what is still the deadliest natural disaster in US history.