(Updates storm position, adds emergency declaration)

MIAMI, Aug 21 (Reuters) - Tropical Storm Fay came ashore on the Florida coast for the third time in less than a week on Thursday, bringing more of the torrential rain that has flooded hundreds of homes.

The storm, which had threatened to strengthen into a hurricane as it plowed through the Caribbean, over the Florida Keys and on to the state's southwest coast on Tuesday, was just west of Flagler Beach in northeast Florida by 5 p.m. (2100 GMT), U.S. forecasters said.

The sixth storm of what experts predict will be a busy Atlantic hurricane season, Fay was moving west at just 5 miles per hour (7 kph) after its third Florida landfall, the U.S. National Hurricane Center said.

The storm, with top sustained winds of 60 mph (95 kph), was expected to slowly cross the state back to the Gulf Coast, before dissipating over Alabama or Mississippi.

There was a faint possibility the storm could steer farther south and strengthen over the warm waters of the Gulf of Mexico. It could then target an area where offshore rigs produce a large amount of oil and natural gas and also the city of New Orleans, which was swamped by Hurricane Katrina in 2005.

The storm brought torrential rain of up to 21 inches (53 cm) to areas around Cape Canaveral, home of the U.S. space shuttle fleet. The precipitation is sorely needed in a state where urban development and two years of below-average rainfall have strained water supplies.

Emergency crews had to rescue some people from flooded neighborhoods in boats and airboats, flat-bottomed vessels driven by airplane propellers that are used in the marshlands of the Everglades and Louisiana.

Hundreds of homes were affected, local officials said.

Torrential rains were expected to persist given the storm's slow pace. The hurricane center predicted up to 10 more inches(25 cm) of rain across central and northern Florida, with isolated amounts of 15 inches (38 cm) in places.

President George W. Bush declared a storm emergency in Florida, which authorized federal disaster relief. (Reporting by Michael Christie; Editing by Jane Sutton and Peter Cooney)

AlertNet news is provided by