With water rising in the streets of New Orleans and conditions rapidly deteriorating, Gov. Kathleen Blanco said Tuesday that the tens of thousands of people now huddled in the Superdome and other rescue centers would have to be evacuated.

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"The situation is untenable,'' Blanco said at a news conference. "It's just heartbreaking.''

Water was reportedly rising in the Superdome. Officials were using helicopters to drop 3,000-pound sandbags onto the levees, hoping to close the breach.

Because of two levees that broke Tuesday, the city was rapidly filling with water, the governor said. She also said the power could be out for a long time, and the storm broke a major water main, leaving the city without drinkable water.

With much of New Orleans flooded by Hurricane Katrina, looters floated garbage cans filled with clothing and jewelry down the street in a dash to grab what they could.

In some cases, looting on Tuesday took place in full view of police and National Guard troops.

At a Walgreen's drug store in the French Quarter, people were running out with grocery baskets and coolers full of soft drinks, chips and diapers.

Denise Bollinger, a tourist from Philadelphia, stood outside and snapped pictures in amazement.

``It's downtown Baghdad,'' the housewife said. ``It's insane. I've wanted to come here for 10 years. I thought this was a sophisticated city. I guess not.''

Around the corner on Canal Street, the main thoroughfare in the central business district, people sloshed headlong through hip-deep water as looters ripped open the steel gates on the front of several clothing and jewelry stores.

Looters filled industrial-sized garbage cans with clothing and jewelry and floated them down the street on bits of plywood and insulation as National Guard lumbered by.

At a drug store on Canal Street just outside the French Quarter, two police officers with pump shotguns stood guard as workers from the Ritz-Carlton Hotel across the street loaded large laundry bins full of medications, snack foods and bottled water.

``This is for the sick,'' Officer Jeff Jacob said. ``We can commandeer whatever we see fit, whatever is necessary to maintain law.'' President Bush decided to cancel the rest of his vacation to concentrate on federal relief efforts for victims of Hurricane Katrina as his top disaster relief official lamented ``catastrophic'' damage in three Southern states.

Bush is considering tapping U.S. emergency petroleum stockpiles to ease the storm's impact on affected refineries. Administration officials said Bush was expected to authorize a loan of at least some oil from the nation's Strategic Petroleum Reserve.

Mississippi's governor said the death toll in one county in his state could be as high as 80.

Gov. Haley Barbour of Mississippi said there were unconfirmed reports of up to 80 deaths in Harrison County and the number was likely to rise. An untold number of people were also feared dead in Louisiana. At least five other deaths across the Gulf Coast were blamed on Katrina.

Also, two levee breaches on Tuesday morning are sending floodwaters pouring into low-lying New Orleans.

NBC's Brian Williams reported from the edge of the French Quarter that what had been dry land "was filling with water" this morning. "We have a new problem in this city," he said. By 8 a.m., some French Quarter streets were under several inches of water.

NBC's Kerry Sanders, reporting from a helicopter above the city, said "it's basically one giant lake here in New Orleans."

No deaths have been officially confirmed in Louisiana, but New Orleans Mayor Ray Nagin said "many, many reports" were coming from rescuers of bodies floating in high waters that covered most of the city.

A colonel with the Army Corps of Engineers said one in the eastern part of the city has forced "significant evacuations" in Orleans and St. Bernard parishes. The Corps said another breach in western New Orleans that began Monday afternoon may have grown overnight.

One man said he and his fiancee sat on their roof for three hours before being taken to safety. Bryan Vernon said the water "kept rising and rising and rising."

Mayor Ray Nagin has said that "80 percent" of the city is under water. He said it's 20 feet deep in some places.

Ten hospitals in New Orleans are running on emergency backup power.

The mayor of Biloxi, Miss., said, "This is our tsunami." Rescue teams are preparing to head into neighborhoods devastated by Hurricane Katrina to search for survivors and the dead.

Earlier, authorities said three people had been killed in central Mississippi by falling trees. At least two deaths in Alabama are blamed on storm-related highway accidents.

Katrina, now downgraded to a tropical storm, has also knocked out power to more than 1 million people from Louisiana to Florida's Panhandle. Officials said restoring power could take months.

The storm's impact is far from over. Forecasters said it could dump eight or more inches of rain in the Tennessee and Ohio Valleys.