"Come in, inspect your property, if you want to stay, you're free to stay," Mayor Ray Nagin said. "We're also allowing people to come in to look and leave, and those areas will be the areas that are flooded."

He had earlier invited residents back to the city's least-flooded neighborhoods, a first step in repopulating the city. But on Wednesday he urged those returning to devastated homes to leave after checking their property.

If phase one goes well, he said, residents in the rest of the city, except the twice-flooded Lower Ninth Ward, will be allowed back home October 5, more than one month after Hurricane Katrina struck the Gulf Coast.

Nagin had wanted to start repopulating his city last week, but he was forced to suspend his program as Hurricane Rita swirled across the Gulf of Mexico.

That storm largely spared the city, except the impoverished Lower Ninth Ward which suffered fresh flooding Saturday.

Hundreds of thousands of Americans along the Gulf of Mexico coast remain homeless in the wake of the two huge storms as US leaders continue to spar over the government's response to the disaster.

The death toll from Hurricane Katrina increased to 1,132 Wednesday as 11 more fatalities were confirmed in Louisiana, authorities said. There are 10 confirmed deaths from Rita.

Rescuers in helicopters and boats continued to patrol for victims throughout the flooded lowlands and devastated communities.

Rita failed to deliver a catastrophe on the scale of the first storm but it has fed the criticism of US authorities' response to natural disasters. Hundreds of thousands of evacuees were stranded on clogged highways when the hurricane hit, while others have found themselves marooned in the disaster zone with little assistance.

Meanwhile, in Washington, Louisiana governor Kathleen Blanco pleaded with US lawmakers in a congressional hearing to speed up aid to rebuild her state which has suffered devastating damage from two hurricanes in less than a month.

"Hurricane Rita has only added to the destruction and misery of our people," she said of the potent storm that hit Saturday.

But the governor would not be drawn into a controversy that erupted after the former top federal disaster official, Michael Brown, accused her of botching operations responding to Katrina.

On her first visit to Washington since Katrina flattened huge tracts of the Gulf Coast on August 29, Blanco said jobs are desperately needed to lure back the huge numbers who fled the massive storm.

"We need jobs to bring our people home and restore our economy," Blanco said.

Separately, Gary LaGrange, president and chief executive of The Port of New Orleans, told the Senate Finance Committee that it would take "months if not years to fully recover" from the storms.

The Port of New Orleans, a key to US maritime operations, is operating at just 20 percent capacity and needs repairs costing some 1.7 billion dollars, LaGrange said.

Meanwhile, lawmakers and officials of President George W. Bush's administration wrangled over how to pay the immense recovery bill, and how best to get that money to those who need it as questions arose about some of the aid that has already flowed.

According to The New York Times, 80 percent of the 1.5 billion dollars' worth of contracts awarded by the Federal Emergency Management Agency (FEMA) in the days after Hurricane Katrina did not involve a general tender.

The Washington Post on Wednesday highlighted a 236 million dollar contract with Carnival Cruise Lines to house evacuees for six months aboard three cruise ships.

The ships currently lay half empty in the Mississippi river and off Mobile bay in Alabama.

Louisiana has demanded 250 billion dollars in federal aid, including 40 billion to repair the levees of New Orleans, which overflowed after Katrina struck. Mississippi and Alabama are expected to need another 50 million.

Even some of Bush's own Republicans are worried the bill will cause the federal deficit to spiral, and are pushing for a review of other spending projects already approved. And others want to investigate whether billions of dollars in government funds for relief aid are being wasted.

The double blows of hurricanes Katrina and Rita will likely shave up to one percentage point off US third-quarter economic growth, but not cause a recession, a senior White House advisor said.

"There are various estimates about the third quarter ... numbers between half and one percent," said Ben Bernacke, Chairman of the White House chairman of Economic Advisors.

"That will probably leave us a decent rate of growth in the third quarter," he predicted.

Bush has urged Americans to cut back on driving, and the White House said it would ask government employees to avoid unnecessary travel.

All rights reserved. � 2005 Agence France-Presse. Sections of the information displayed on this page (dispatches, photographs, logos) are protected by intellectual property rights owned by Agence France-Presse. As a consequence, you may not copy, reproduce, modify, transmit, publish, display or in any way commercially exploit any of the content of this section without the prior written consent of Agence France-Presse.

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