Louisiana - New Orleans Mayor Ray Nagin suspended the return of residents to his flood-stricken city, still recovering from the effects of Hurricane Katrina, as a potentially dangerous new storm brewed in the region.

Nagin said the levees breached by the August 29 super storm were still too weak to withstand a new beating as Tropical Storm Rita strengthened and headed for the United States Gulf Coast from the Atlantic.

The current forecast is for Rita, which meteorologists believe will become a full-force hurricane, to pass just south of New Orleans late on Thursday.

The storm however could easily veer further north and slam into the jazz city.

'We are taking Rita very, very seriously'

"We are suspending all re-entry into the city of New Orleans as of this moment," Nagin said on Monday.

Louisiana Governor Kathleen Blanco, who was heavily criticised over her handling of the Katrina disaster, warned citizens to be ready to leave coastal areas.

"We are taking Rita very, very seriously," she said.

"I want citizens who are in the coastal parishes to start making preparations to leave now," Blanco said.

Florida authorities ordered the evacuation of several islands in the Keys chain off the south coast because of Rita.

'We're staying - we ain't going nowhere'

Nagin warned people who have already returned to be ready to evacuate again.

His decision to let some 180 000 residents return by the end of the month was criticised by federal authorities and even President George Bush as too ambitious.

New Orleans remains unsafe, with some districts still under water, and with most lacking clean tap water and reliable electricity.

More than 950 people were killed by the storm and floods, and only a few families have re-entered the city, as relief crews race to restore power, water and sewage pipes wrecked by Katrina.

"We're cautious about encouraging people to return at this moment in history," Bush told reporters in Washington

"It's just a matter of timing, and there's issues to be dealt with," he said.

Nagin however defended his plan. "My thought has always been that if we have this many resources in the city, working co-operatively, then we can correct just about any situation that was out there.

"But now we have conditions that have changed," Nagin said. "We have another hurricane that's approaching us."

In Algiers, on the west bank of the Mississippi, a small number of families returned to their abandoned homes in cars and trucks.

Residents were dismayed that they may have to flee again.

"After the experience that we've had... we're going to take this seriously," said Andrew Svirsky, 51, who was clearing branches from his yard with his wife Lacey Howell. Their home had no damage.

During Hurricane Katrina, the two stayed helping patients in a hospital where Howell works, but were evacuated by a helicopter a few days later and only returned home on Monday.

This time, "if the mayor says there's a mandatory evacuation, we're leaving," said Howell, 49.

Compared with other areas of New Orleans, Algiers is largely unscathed, and has power and tap water.

Returning residents counted themselves the lucky ones.

"I'm thankful I had a home to get to," said Joyce Johnson, 70. "A lot of people, they don't have anything. The Lord spared Algiers."

Jacob Paul, 33, and his wife Hzadit, 26, returned with their four children, including a five-month-old baby.

They had spent the past three weeks in a precarious, gypsy-like existence, roaming from location to location across the southeastern US.

"We're just glad to be home. We couldn't take it no more," said Hzadit, adding firmly: "We're staying. We ain't going nowhere."

Other districts had been due to reopen from Tuesday. At the weekend, business people were readmitted to the city's French Quarter and other central districts.

But only a trickle of entrepreneurs showed up, apparently discouraged by the mountainous problems of infrastructure, especially electricity supplies, which are essential to provide air conditioning in New Orleans' sultry heat.

Many were dismayed to find their businesses had been trashed by looters who took over the city after its streets flooded.

The storm forced about a million people to leave their homes. Some 100 000 are still living in shelters.

As for the economic cost, estimates of the final tab remain speculative, with some figures in the region of $200-billion (R1-trillion).

But White House spokesperson Scott McClellan said on Monday that there would be only a "short term impact" on the US economy. - Sapa-AFP