CAMAGUEY (Cuba) - MORE than half a million people were forced to leave their homes as a weakening Hurricane Paloma passed over southeastern Cuba early on Sunday, lashing the island with rain, gale-force winds and massive waves.

After making landfall on Cuba's southeast coast earlier in the day as a powerful Category Three storm, Paloma weakened to Category One, displaying winds of 140 kilometres an hour, the US National Hurricane Center said.

At 0900 GMT, the eye of the hurricane was located 45 kilometres southeast of the city of Camaguey, Cuba, according to the US center.

Faced with a devastating storm, more than 500,000 Cubans were evacuated to central provinces. Some 3,000 foreign tourists were being sheltered on northern holiday islands in the central region of Ciego de Avila, the Civil Defence said.

The town of Santa Cruz found itself in Paloma's crosshairs 76 years after another major hurricane devastated the area, killing more than 3,000 people in what was the largest natural disaster in modern Cuban history.

Cuba's Civil Defense had already issued hurricane warnings for the central and eastern provinces of Camaguey, Las Tunas, Holguin, Granma, Santiago de Cuba and Guantanamo.

The hurricane was expected to wreak havoc on the cash-strapped communist-ruled island of more than 11 million people, which has been already devastated this season by two other monster storms.

But authorities assured the country was up to the challenge.

'We'll have to continue rebuilding, continue to move forward,' General Jose Ramon Pardo Guerra, chief of staff of the Civil Defence, told local radio.

Moving northeast at seven kilometres an hour, Paloma was also forecast to decrease in forward speed as it made its way across Cuba.

Paloma had intensified to a Category 4 storm with winds up to 215 kilometres per hour as it crossed the Caribbean. It left devastation in its wake on the Cayman Islands, a British territory with tourism and banking interests, south of Cuba's southern coast.

Residents of Grand Cayman emerged from shelters on Saturday morning to piles of debris, flattened trees, and localised flooding. Power to most of the island had been restored by midday, and Grand Cayman's governor Stuart Jack reported no casualties.

But the smaller islands of Cayman Brac and Little Cayman were devastated by the strongest storm to hit the islands since 2004's Hurricane Ivan.

'Probably 90 to 95 per cent of homes and buildings have been damaged' on Cayman Brac, local commissioner Ernie Scott said by telephone. 'Some have been totally devastated.'

There were no early reports of casualties, as all tourists were evacuated and most residents were moved to shelters, Mr Scott said.

In Cuba, potentially catastrophic storm surge flooding of 15 to 20 feet (4.5 to 6.0 metres) accompanied by large and dangerous battering waves are expected near and to the east of Santa Cruz del Sur along the south coast of Cuba, US forecasters said.

Most residents had evacuated Santa Cruz by midday Saturday to avoid a potential repeat of the November 9, 1932 storm that hit near Santa Cruz.

That storm killed 70 per cent of the population, its winds topping 250 kilometres per hour, flooding the area with nine-metre waves.

Cuba is reeling from a devastating storm season, with Paloma the third hurricane to crash into the island in 60 days.

The season's storms, including Hurricanes Gustav and Ike, have left hundreds dead across the Caribbean and Central America and wrought billions of dollars in damage.

Gustav and Ike, which struck Cuba on August 30 and September 9, caused an estimated 9.3 billion dollars in damage, according to official reports. The storms damaged tourism infrastructure and destroyed about 80 per cent of crops.

Gladys Sanchez, a resident of Minas, north of Camaguey city, told AFP by telephone that 'no one had expected another hurricane.' 'There are people here who are still homeless', she said, adding that local residents had just begun to recover from the previous storms.

'It has been raining here since morning - everything is dark,' she said.

Paloma was forecast to power across Cuba and into the Atlantic Ocean by Sunday morning.

It is expected to reach the central Bahamas late on Sunday or Monday, the NHC said. -- AFP