Italy has called off rescue operations in some of the areas stricken by a powerful earthquake that killed at least 278 people as hopes of finding more survivors have faded.

Three days after the quake struck the mountainous heart of the country, sniffer dogs and emergency crews on Friday continued to scour the town of Amatrice, which was levelled in the disaster, but there was no sign of life beneath the debris.

"Only a miracle can bring our friends back alive from the rubble, but we are still digging because many are missing," Sergio Pirozzi, the town's mayor, said, adding that about 15 people, including some children, had not been accounted for.

Hardly a single building was left unscathed in Amatrice, which was last year voted one of the most beautiful old towns in Italy and is famous for its local cuisine.

Italy sits on two fault lines, making it one of the most seismically active countries in Europe [Gregorio Borgia/AP]

Most of the buildings in the Amatrice area were built hundreds of years ago, long before any anti-seismic building norms were introduced, helping to explain the widespread destruction.

Rescuers pulled out from nearby villages such as Pescara del Tronto after all the inhabitants had been accounted for.

READ MORE - Italy earthquake: Rescuers race to find survivors

Italy plans to hold a state funeral for about 40 of the victims on Saturday, which will be held in the nearby city of Ascoli Piceno.

A day of national mourning was announced, with flags due to fly at half-staff around the country for the dead, who include a number of foreigners.

The civil protection department in Rome said almost 400 people were being treated for injuries in hospitals, and 40 of them were in critical condition. 

Survivors with nowhere else to go are sleeping in rows of blue tents set up close to their flattened communities.

The government has promised to rebuild the region, but some local people fear that would never happen.

"I'm afraid our village and others like it will just die. Most people don't live here year-round anyway. In the winter time, the towns are virtually empty," said Salvatore Petrucci, 77, who came from the nearby hamlet of Trisunga.

"We may be the last ones to have lived in Trisunga."

 

Italy sits on two fault lines, making it one of the most seismically active countries in Europe. Almost 30 people died in earthquakes in northern Italy in 2012 while more than 300 died in the L'Aquila disaster.

Prime Minister Matteo Renzi has declared a state of emergency for the region, allowing the government to release an immediate 50m euros ($56m) for relief work.

He has promised to rebuild the shattered homes and said he would also renew efforts to bolster Italy's flimsy defences against earthquakes that regularly batter the country.

"We want those communities to have the chance of a future and not just memories," he told reporters in Rome on Thursday.

Italy has a poor record of rebuilding after quakes. About 8,300 people who were forced to leave their homes after the deadly earthquake in L'Aquila in 2009 are still living in temporary accommodation.

Source: Reuters