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Florida Governor Rick Scott, left, listens to Federal Emergency Management Agency Administrator Craig Fugate speak to workers inside the State Emergency Operations Center in Tallahassee, Fla., on Aug. 27, 2012, as Tropical Storm Isaac churned across the Gulf of Mexico.PHILIP SEARS

Tropical Storm Isaac had nearly reached hurricane strength as it bore down on the U.S. Gulf Coast on Tuesday and appeared to be taking direct aim at New Orleans, almost seven years to the day since the Crescent City was devastated by Hurricane Katrina.

U.S. President Barack Obama Tuesday warned of significant damage and flooding from Tropical Storm Isaac, telling people in its path to take the "big storm" seriously and follow directions.

"I want to encourage all residents of the Gulf Coast to listen to your local officials and follow their directions, including if they tell you to evacuate," Mr. Obama said in a televised statement at the White House.

"We're dealing with a big storm and there could be significant flooding and other damage across a large area. Now is not the time to tempt fate. Now is not the time to dismiss official warnings. You need to take this seriously."

Obama noted that the storm, forecast to become a hurricane later Tuesday, was expected to make landfall later in the day, and said he had managed a wide-ranging effort by federal and local governments to make preparations.

Isaac's swirling winds and rain will pose a major test of the region's new flood control systems, the U.S. National Hurricane Center said. The centre's forecasts showed the storm likely to make landfall late on Tuesday near southeastern Louisiana.

"Isaac is likely to become a hurricane later today. Additional strengthening is forecast until the centre moves inland," the centre said in its 5 a.m. EDT  advisory.

Rain and tropical storm force winds were expected to spread into the region in the coming hours, bringing the threat of storm surge and flooding.

Isaac had New Orleans in its sights as the city still struggles to recover from Hurricane Katrina which swept across it almost exactly seven years ago on Aug. 29, 2005, killing more than 1,800 people and causing billions of dollars of damage.

Authorities urged thousands of residents in low-lying areas to evacuate, warning the storm could flood towns and cities in at least three U.S. Gulf Coast states with a storm surge of up to 3.6 metres.

Isaac also threatened heavy rainfall, with possibly as much as 460 millimetres in areas, potentially triggering flooding in some coastal areas.

Residents in coastal communities from Louisiana to Mississippi stocked up on food and water and tried to secure their homes, cars and boats.

In New Orleans, a bumper-to-bumper stream of vehicles left the city on a highway toward Baton Rouge in search of higher ground. Others prepared, or were forced, to ride the storm out.

The storm was forecast to strengthen into a Category 1 hurricane, the lowest on the Saffir-Simpson scale, with top winds of 145 kilometres an hour. While that would be well below the intensity of Katrina, a Category 3 storm, the size of Isaac's slow-moving system has forecasters predicting widespread flooding.

"Even if it is a tropical storm at landfall, the large size of it will still generate significant storm surge," Hurricane Center Director Rick Knabb told reporters. "That is life-threatening potentially."

Along Canal Street in New Orleans' historic French Quarter, crews were boarding up the windows of stores and businesses.

"I'm not all that concerned about the storm. It's still a Category 1," said Charles Neeley, a 69-year-old contractor overseeing workers covering the windows of a CVS drugstore.

"We usually ride out ones and twos, and get the hell out for threes and fours."

Nonetheless, Mr. Neeley said he had stocked up on food and water at home and fuel for his generator.

"Our flights were canceled so we're going to be here," said Karen Foley, a 23-year-old tourist who had planned to travel home to New Jersey with a friend. "We are just hoping the city doesn't get hit again. It doesn't deserve it."

Isaac was centred 205 kilometres southeast of the mouth of the Mississippi River with top sustained winds of 110 km/h - a speed that places the storm very near hurricane status - and swirling northwest at  19 km/h.

The storm was more than 645 kilometres wide. Craig Fugate, director of the Federal Emergency Management Agency, said the worst effects may well be in Mississippi and Alabama.

Isaac killed at least 22 people and caused significant flooding and damage in Haiti and the Dominican Republic before skirting the southern tip of Florida on Sunday.

After Katrina, the U.S. Army Corps of Engineers built a $14.5-billion flood system of walls, floodgates, levees and pumps designed to protect the city against a massive tidal surge like the one that swamped New Orleans in Katrina's wake.

In low-lying Plaquemines Parish, which could be the first to be lashed by Isaac's winds and storm surge, workers scrambled to stack sandbags and reinforce levees as Isaac lurked in the Gulf.

Much of the parish lies outside the greater New Orleans levee system, and construction projects to bolster protection are not yet complete.

"We're really worried about the storm surge. We really need a few more years before we see an event like this," said Plaquemines Parish President Billy Nungesser.

Energy companies evacuated offshore oil rigs and shut down U.S. Gulf Coast refineries as the storm threatened to batter the oil refining belt.

Oil firms ferried workers in helicopters from oil platforms hundreds of miles offshore in the Gulf of Mexico.

As a precaution, as of Monday afternoon, the energy industry had shut down 78 per cent of Gulf of Mexico crude production and 48 per cent of its natural gas production, government figures showed.

Once ashore, the storm could wreak havoc on low-lying fuel refineries along the Gulf Coast that account for about 40 per cent of U.S. refining capacity.

Louisiana Governor Bobby Jindal said President Barack Obama approved his state's request for a federal disaster declaration, making federal funds available for disaster recovery activities like clearing debris.

The ports of Mobile and New Orleans were closed and barge traffic was suspended along southern portions of the Mississippi River.

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