The US leader, whose response to devastating Katrina in 2005 drew harsh criticism, came to the southeastern state a day after the storm battered fishing villages to the west of New Orleans and knocked out electricity across a wide area.

Bush, who arrived in Baton Rouge with FEMA (Federal Emergency Management Agency) chief Dave Paulison, has worked to show that he is on top of disaster response efforts after Gustav came ashore.

Only 10,000 people were estimated to have remained in New Orleans, a city of 300,000 people, when Gustav pushed into the Gulf coast Monday, amid fears of a repeat of the catastrophic flooding that came with Katrina three years ago.

New Orleans Mayor Ray Nagin on Wednesday allowed residents to begin returning to the city, voiding a mandatory evacuation order and lifting police roadblocks more than 12 hours earlier than planned.

But those returning home sometimes found less than ideal conditions: Local utility companies said that more than a million homes and business were without power.

Louisiana Governor Bobby Jindal also has warned that most gasoline stations in the state are empty, posing another huge problem for the thousands of cars and trucks returning home.

And for some, the situation was grimmer still: Pat Dubendorfer, for one, returned to find his home in New Orleans Parish looted.

A 52-inch flat-screen television had been yanked from a living room wall and a half-dozen guns taken from a bedroom closet, he said as he surveyed the scene. A small-caliber rifle was the only weapon that remained.

"Honest to God I thought they were still in the house," Dubendorfer said while recounting his arrival some 30 minutes earlier.

"First thing I did was grab the gun, chamber it and walk through my house. At least they left ammunition."

The looters were gone, as was the weighty central air conditioning compressor that had been on a platform abutting Dubendorfer's home.

Nevertheless, some returnees said they were prepared to capitalize from the massive influx of residents back home. Renie "Jack" Wen crammed meat and ice into a giant cooler in his powerless family market in a New Orleans suburb and hoped it wouldn't spoil.

He then teamed with his wife Yan Li and their son, Qiushi, to strip away sheets of plywood they had screwed over windows of Sam's Super Meat Market in Greta to shield them from Gustav's wrath.

"We want to fight for the community," Wen told AFP as he labored in the heat.

"They are coming back," he said. "They will need food."

Bush has declared the region a major disaster zone, making federal funding available for storm-related home repairs and additional rebuilding assistance.

Oil rigs in the Gulf appear to have survived without serious damage, according to initial surveys, as oil workers prepared to return.

Nevertheless, Bush also announced the government was releasing 250,000 barrels of oil from its strategic petroleum reserve, after the region's refineries saw their production curtailed by the storm.

"Last night we got a request from a company doing business here in Louisiana and we met that request," Bush said Wednesday.

"So oil was released from the Strategic Petroleum Reserve. And we will continue to do that upon requests by companies."

The US president praised emergency workers for a "much better coordinated" response than was seen after Katrina, and for rushing aid to remote areas, as well as New Orleans and Baton Rouge.

"All in all, the response has been excellent," Bush said. "But the people here understand that there is more work to be done."

While New Orleans was spared a severeblow like the one dealt by Katrina, Jindal said widespread damage from Gustav could still be seen throughout the state.

Risk analysis firm Eqecat says storm damage costs could reach three to seven billion dollars.

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