(Corrects para nine to show date of Indian Ocean tsunami as 2004, not 2003)

By Walter Nalangu

HONIARA, April 2 (Reuters) - At least two people were killed and several more were missing after a powerful earthquake and tsunami struck the tiny Solomon Islands, triggering panic across the Pacific and fears of further big waves.

The shallow quake, with a magnitude of at least 8.0, levelled buildings and damaged a hospital on Gizo Island northwest of the Solomons capital, Honiara, while a tsunami sucked homes into the sea as thousands of panicked residents fled for higher ground.

A 12-year-old girl in Gizo, the provincial capital, drowned as the tsunami swept ashore, and an elderly woman died when she was trapped in her house as it was washed into the sea by the retreating wave, according to eyewitness reports. "It was just like a real extreme tide ... the water just came up about probably about 4 to 5 metres (12 to 15 feet) above sea level and kind of just went up into the communities and doused everything," Danny Kennedy, a dive shop owner and provincial politician on Gizo, told Reuters.

Jackson Kiloe, the Premier of the western Solomons island of Choiseul, said huge rolling waves were crashing ashore, prompting evacuations.

"The huge wave rolls are stronger than floods," he said. "They are causing large areas of ocean to dry up."

In the Papua New Guinea port city of Rabaul, residents fled as the sea drained, a possible pointer to a coming tsunami.

The Pacific Tsunami Warning Center in Hawaii placed the quake's centre 350 km (220 miles) north-west of Honiara when it struck at about 6:40 a.m. (2040 GMT on Sunday).

An alert from the centre also prompted regional tsunami warnings in Japan and Australia. Beaches along Australia's east coast were shut and ferry services halted on Sydney Harbour amid fears of a repeat of the 2004 Indian Ocean tsunami disaster.

COMMUNICATIONS PROBLEMS

Solomons' disaster management authorities said communications problems were preventing an assessment of damage on Simbo island where the Solomon Islands Broadcasting Corp. said residents had reported waves travelling up to 200 metres (200 yards) inland.

On nearby Mono Island four people were missing after a series of landslides, Solomon Islands' chief government spokesman Alfred Maesulia told Reuters.

In Gizo, a hospital was damaged in the town of about 20,000 and patients had been taken to a doctor's house on higher ground, with more than 2,000 left homeless.

"There are quite large boats sitting in the middle of the road. Many of the houses that were on stilts are sitting on the ground. A number of the coastal communities have been completely wiped out," dive shop owner Kennedy said.

The National Disaster Management Office manager Julian McLeod said up to 60 buildings had been destroyed, including houses.

"We are telling people to flee to higher ground in case of more waves. We're used to cyclones hitting the island, but this is a new one," he said.

Geological agencies, including those in Australia and Japan, put the magnitude of the quake at 8.1 while the U.S. Geological Survey's (USGS) revised its earlier estimate to 8.0.

The initial tremor was followed around seven minutes later by a second one, centred further west, of magnitude 6.7, USGS said.

The Solomon Islands lies on the so-called Pacific "Ring of Fire" where volcanic activity and earthquakes are relatively common.

The islands are popular with international travellers for scuba diving. Most homes in the mountainous islands are constructed of timber and bamboo, with villagers relying on fishing and logging for employment.

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