Hurricane Rita is expected to strengthen to a category 4 storm by 2 p.m. ET Wednesday. Meteorologists predict winds of 210 kilometres per hour to 249 kilomentres per hour with a storm surge of five and a half metres to just over six metres.

Rita became stronger Tuesday as it blasted the Florida Keys with flooding rain and strong wind, threatening the low-lying island chain with a storm surge of up to two metres. There were fears the storm could bring new misery to the U.S. Gulf Coast as it gains strength from the warm waters of the Gulf of Mexico.

High winds in Miami Beach, Florida on Tuesday (Getty Images)

Rita was forecast to become a major category 3 hurricane as it moved into the Gulf with expected winds of 208 km/h. It's targeted to hit land on the weekend, most likely in Texas, but Louisiana or northern Mexico could end up in its path.

Tuesday afternoon Rita became a Category 2 hurricane with sustained top winds of 155 km/h.

Thousands of residents and tourists cleared out of the Keys which were forecast to receive up to 20 cm of rain. The Florida Highway Patrol said at least one segment of the Keys highway, U.S. 1, was barricaded because of water and debris. Wind-driven water was flowing across other sections of the highway. Scattered power outages were reported.

Repairs proceed on the 17th Street Canal levee in New Orleans Tuesday (Getty Images)

Voluntary evacuation orders were posted for 134,000 residents who live along Miami Beach and other coastal areas of Miami-Dade County. Thousands of people also were evacuated from coastal areas in Cuba, on the southern side of the Florida Straits.

Florida Gov. Jeb Bush said about 1,300 people were being housed in shelters in Miami-Dade and Broward counties and all three Keys hospitals had been evacuated.

The governor said more than 2,000 Florida National Guard troops and dozens of law enforcement officers were ready to deal with the storm's aftermath. He said more than 200 truckloads of ice and water were prepared for delivery to the Keys if needed and helicopters are in place for search and rescue.

In preparation, officials in Galveston, Texas, called for a voluntary evacuation of their Gulf Coast island city. Gov. Rick Perry recalled all emergency personnel -- including almost 1,200 Texas National Guard members -- helping with recovery from Hurricane Katrina to prepare for Rita. Authorities stressed that those fleeing the coastal area should bypass Houston, which could lose power and is prone to flooding, and drive on to Dallas, San Antonio or Austin.

Texas officials began to take steps to fly thousands of Hurricane Katrina refugees from shelters in Texas to Arkansas. Harris County Judge Robert Eckels warned that the Houston Astrodome, which temporarily sheltered tens of thousands of Katrina refugees, could not be used if a storm headed that way because of its glass roof.

Galveston tragic anniversary

This month marks the 105th anniversary of the hurricane that wiped out Galveston in 1900. It was one of the deadliest natural disasters in U.S. history. An estimated 8,000 people were killed.

Officials said a mandatory evacuation could be ordered if Rita strengthens into a Category 3 hurricane, with the potential to create flooding up to 13 kilometres inland.

Buses were to begin running Tuesday for people who can't leave on their own, taking them to shelters about 160 kilometres north in Huntsville.

New Orleans worries

Louisiana Gov. Kathleen Blanco urged everyone in the southwest part of the state to prepare to evacuate.

New Orleans Mayor Ray Nagin said Rita could be as dangerous to New Orleans as Hurricane Katrina.

Tuesday morning on NBC, Nagin said any storm surge from Rita could overwhelm the levees and flood "the Crescent city" again.

New Orleans has asked for 200 buses to help in a possible evacuation. Residents who returned home have been told to be ready to evacuate again.

On Monday afternoon, Nagin said: "Now we have conditions that have changed. We have another hurricane that is approaching us." He warned that the city's pumping system was not yet running at full capacity and that the levees were still very weak.

Nagin ordered residents who slipped back into the still-closed parts of the city to leave immediately. He also urged everyone already settled back into the Algiers area to be ready to evacuate as early as Wednesday.

The call for another evacuation came after repeated warnings from top federal officials -- including President Bush himself -- that New Orleans was not safe enough to reopen.

The death toll in Louisiana jumped to 736 on Monday, as receding floodwaters allowed search and recovery crews to dig deeper into the city's neighborhoods.

The toll from Katrina across the Gulf Coast was 973.

Bush goes back to New Orleans - appoints Katrina inquiry head

President Bush was to make his fifth trip to the Hurricane Katrina zone on Tuesday to get an on-the-ground briefing on Rita and to visit a business trying to get back on its feet.

The White House announced that President Bush has named his homeland security adviser, Fran Townsend, to lead an internal inquiry into the federal response to Hurricane Katrina.

Townsend will look at what went right, what went wrong and lessons learned from the federal response to Hurricane Katrina.

A memo from White House chief of staff Andrew Card directed government departments and agencies to designate by Tuesday one senior official to be the coordinator to work with Townsend for their specific agency.

The memo directed agencies to give this effort "their full attention and highest priority."

A CNN/USA Today/Gallup poll released on Monday said 41 per cent of Americans approved of the president's handling of the ordeal, compared to 57 per cent who disapproved.

A separate congressional inquiry will also investigate what went wrong with the federal response. Bush has refused to back calls from Democrats for an independent commission to look at the disaster response.

Oil prices unstable

Crude oil prices in Singapore fell more than a dollar a barrel Tuesday after jumping by four dollars a barrel on Monday - the biggest one-day jump ever recorded. Traders are worried that Rita could damage the Texas oil industry, the heart of U.S. production.

Prices are more than 45 per cent higher than a year ago, but still below all-time high of $70.85 a barrel reached August 30 when Katrina made landfall.

Chevron Corp., Shell Oil and BP PLC have started to evacuate workers from oil facilities in the Gulf of Mexico.

The Louisiana death toll had risen to 736 as of Monday, bringing the total dead from Katrina to 973, including 218 in Mississippi and 19 combined in Florida, Georgia, Alabama and Tennesee.