Hurricane Gustav was downgraded to a tropical storm as it swept inland, sparing New Orleans the devastation wrought by Katrina three years ago when 80 percent of the city was flooded.

The storm left half of New Orleans without power as it lashed Louisiana and Mississippi, toppling trees and tearing off roofs. The city's flood defenses remained intact and the death toll may have been kept to single figures, officials said.

``We had everything coordinated. We had a good plan,'' New Orleans Mayor Ray Nagin said on CNN late yesterday. Officials are ``getting the city ready to receive its citizens again.''

Some 1.9 million people left their homes in Louisiana's coastal areas as authorities, stung by criticism of their handling of Katrina, undertook the biggest evacuation in the state's history. Emergency workers stacked sandbags late yesterday and prevented a storm surge from overwhelming a levee southeast of New Orleans.

``We have stopped the bleeding,'' Billy Nungesser, president of Plaquemines Parish, about 55 miles (88 kilometers) from New Orleans, said in a statement. ``So far no homes have flooded,'' he said.

An unmanned predator drone and a helicopter with night- vision equipment will survey the area's flood barriers, Louisiana Governor Bobby Jindal told reporters yesterday in Baton Rouge, the state capital.

Death Toll

Seven deaths are being blamed on the storm so far, Jindal said, adding that number may rise.

``We're not hearing reports at this time of large numbers of fatalities or injuries,'' Jindal said. ``You are going to see severe property damage.''

Gustav's winds slowed to about 60 miles per hour at 10 p.m. local time yesterday, the National Hurricane Center said. The storm was moving northwest at almost 13 mph and was about 20 miles southwest of Alexandria, Louisiana, according to the advisory.

It is forecast to cross into northeastern Texas later today when it may become a tropical depression, the center said.

Gustav tested the preparedness of authorities after Katrina, which made landfall as a Category 3 storm, killed 1,800 people in Louisiana and Mississippi and caused more than $80 billion in damage.

The Army Corps of Engineers has worked since 2005 to strengthen the levees, which form a ring of barriers surrounding New Orleans, a city of 300,000 people that lies below sea-level. Work isn't scheduled to be complete until 2011.

Flood Walls

Waves crashed high against some flood walls yesterday and washed over the Industrial Canal, exposing weaknesses in the system. Gustav, which came ashore as a Category 1 storm, was less powerful than Katrina and brought a maximum storm surge of about 14 feet, some 5 feet lower than in 2005.

After Katrina, thousands of people were forced to take shelter at the New Orleans Superdome and Convention Center.Only an estimated 10,000 people remained in the city this time to ride out the storm.

In Chauvin, close to the coast southeast of Houma, resident Miriam LeBoeuf stayed put as the eye of the storm passed over.

``My house is five feet off the ground, it was shaking like a freight train,'' she said by telephone yesterday. ``I have glass shelves and they shook right off the wall.''

The hurricane shut down all oil production in the Gulf of Mexico and 95 percent of gas production as Exxon Mobil Corp., Royal Dutch Shell Plc and other companies took safety measures, Jindal said. As much as 20 percent of oil and gas production may be restored by this weekend, he added.

Jindal asked the federal government to release fuel from the Strategic Petroleum Reserve as about 85 percent of South Louisiana service stations don't have fuel in their tanks.

Gustav may trigger insurance claims as high as $10 billion making it potentially the fourth-highest total among storms that hit the U.S. Insured losses on land will be between $3 billion and $7 billion and oil-drilling damage between $1 billion and $3 billion, according to Newark, California-based Risk Management Solutions Inc.