Iranian authorities said on Tuesday that as many as 50,000 might have perished in the Bam earthquake.
Such a figure would make the earthquake that hit the ancient Silk Road city one of the most lethal natural disasters of recent times.
Friday's tremor, which measured 6.3 on the Richter scale - struck just before dawn, killing entire families as they slept.
Hundreds of bulldozers and recovery workers continued the gruesome task of pulling out rotting corpses. State television reported overnight 28,000 bodies had so far been recovered and buried.
The Interior Ministry official said 80% of Bam's mud-brick buildings had been flattened and many outlying villages had not yet been fully searched by rescuers.
The Stars and Strips received a rare welcome in Iran on Wednesday as US medics joined efforts to help survivors.
The 80-strong US team of medics and relief experts arrived in Iran on Sunday but only reached Bam on Tuesday evening.
"For Americans to come here and help us in such a situation, I really appreciate it and all Iranians appreciate it," said Shia Muslim cleric Sheikh Ahmad Faiz, as US relief workers erected a tent bearing a large US flag.
The U.S. government broke ties with Tehran shortly after the 1979 Islamic revolution and the American flag is routinely burned during official anti-US demonstrations.
Caring for survivors
Aid agencies are now focussing their activities on caring for survivors pleading for clothing, blankets and medicines for the tens of thousand left homeless or injured.
A 150-bed field hospital of the Red Cross and Red Crescent movement arrived on Tuesday in southeastern Iran along with German, Finnish and Norwegian medical personnel to assist the wounded.
The mobile unit is intended to cover for Bam's two hospitals which lie in ruins. It can treat hundreds of patients a day and should be operational within one or two days.
Mass burials are taking place to
cope with tens of thousands dead
"We're in a transition period from search and rescue to humanitarian assistance," said Jesper Lund, team leader of United Nations Disaster And Assessment Coordination (UNDAC) which was coordinating relief efforts from a military base outside of Bam.
Despite the massive international response, aid workers said more was needed to assist an estimated 100,000 people left homeless and thousands more injured in the quake.
"There has been quite a bit of aid coming in but there is not enough. There are still gaps to be filled," said Rob MacGillivray, emergency adviser for Save The Children in Bam.
Restoring primary healthcare services was a priority after Bam's two main hospitals were destroyed by the quake, he added. Blankets, children's clothes, soap, cooking sets and large cans to store drinking water were also badly needed.
The latest show of political solidarity came from Iran's Islamic neighbour, Turkey, which annnounced that Foreign Minister Abdullah Gul will make a brief visit on Wednesday to the disaster site.
Turkey has dispatched medical and rescue teams, sniffer dogs and humanitarian supplies to the scene.
Turkish emergency workers have experience in responding to earthquakes - two major tremors hit Turkey's northwest in August and November 1999, claiming about 20,000 lives.