Houston  - The lethal hurricane bearing down on the Texas coast has sent 1.2 million people fleeing for safety as Ike threatens with 16- metre breakers and 7-metre flooding, Texas Governor Rick Perry said Friday.

The evacuation included 12,500 seriously ill or elderly people, Perry told CNN broadcaster.

"The evacuation went relatively well," he said.

Hurricane Ike is now a huge category-2 storm that could strengthen to category 3 by the time it slams into the Gulf Coast and Galveston between 0200 and 0600 GMT.

Perry warned of the aftermath of huge damage to the petrochemical industry if Ike's storm surge rushes up the shipping channel into Houston, the town of 4 million that is bracing for high winds and huge breakage of windows in its high rises.

Houston is home to 15 per cent of all the petrochemical refineries in the country, he noted.

"Keeping this economy going is going to be an important secondary role," he said. "The storm has the potential to do long=term economic impact not just to Texas but to the country."

A 7-to-8-metre storm surge is expected to completely inundate Galveston's barrier island community of 60,000. Half the mostly evacuated town was already under water by 8 am Friday.

Galveston was the scene in 1900 of the country's worst known natural disaster in 1900, when a hurricane killed up to 8,000 people.

Fox News showed a group of about 10 people partying on an outside deck in Galveston that was totally surrounded by water. Earlier, police and firefighters made their final sweep through Galveston with a large dump truck to pick up any hold-outs willing to leave.

The National Weather service warned that people who did not follow the mandatory evacuation faced certain death.

Port Arthur, which sits northeast of Galveston on an inland lake, could face a storm surge of up to 8 metres, Perry noted.

Utility officials are bracing for power outages that could affect more than 5 million people.

The Gulf Coast from Morgan City, Louisiana, just west of New Orleans, to Port Aransas, Texas, was bracing for the lethal storm.

Ike has already killed at least 72 people on Haiti and four people in Cuba as it stalked across the warm waters of the Gulf of Mexico since last weekend.

The storm carries "large and dangerous battering waves," the Miami-based National Hurricane Centre warned.

Ike could produce rainfall from 12 to 40 centimetres over the next days, the centre said.

The US Coast Guard and Army gave up on the attempted rescue of a Cypriot freighter wallowing in the angry waters 150 kilometres south of Galveston. (dpa)