The most serious temblor to hit the state since a 6.7 quake wreaked havoc on Los Angeles in 1994, struck at 11:15:56 am (almost 1916 GMT) about 11 kilometers (seven miles) northeast of the coastal town of San Simeon.

The quake was felt as far away as Los Angeles, 250 kilometers (150 miles) to the south and in the northern city of San Francisco, and did significant damage to the historic town of Paso Robles.

A two-storey building that boasted a landmark old clock tower collapsed in the town, about 57 kilometers (36 miles) east of the epicentre, killing two, police said.

"The whole town shook and the building came down, it was horrible," Brandy Wilson, who works at the Best Western hotel in the town, told AFP.

The roof of the building, reportedly built in 1892, appeared to have been thrown off the building, scattering rubble and wreckage for hundreds of meters (yards) and crushing a row of cars nearby.

Some 40 people were injured in the earthquake officials said, and emergency services were working to shore up damages buildings.

"As of now, we have reports of two deaths attributed to the quake and have no reason to believe that anyone is still trapped in the building that collapsed," said California Highway Patrol spokesman, Officer Scott Lee.

Earlier, authorities had said that three people were believed dead, but Lee said those reports appeared to be erroneous.

Bricks that had fallen from older historic buildings in Paso Robles lined the streets while windows of several structures were shattered.

Earthquake experts said the town may have been worse hit because it boasts many old brick buildings which are less flexible than wood, the main construction material used in other towns surrounding the quake epicentre.

Telephone lines to the stricken area were jammed hours after the quake and power to a reported 40,000 homes was cut in the wake of the temblor.

Apart the damage and deaths in Paso Robles, officials reported no major damage or serious injuries across the region.

"We have a typical 6.5 magnitude earthquake that fortunately has occurred far from densely populated areas," US Geological Survey (USGS) (Eds: correct) geophysicist Ross Stein told reporters near San Francisco.

He said the damage could have been enormous had the quake hit the major population centres of San Francisco and Los Angeles and warned that it was possible, but not likely, that major aftershocks could still follow.

The quake struck in a tourist area around the town of San Simeon, the site of Hearst castle, the famed and historic home of US press baron William Randolph Hearst. Reports said the castle was damaged and evacuated.

Melissa Figueroa, a producer at KSBY television in San Luis Obisbo. 25 miles south of Paso Robles said the temblor rocked her newsroom.

"We haven't had a quake like this for years," she told AFP. "The whole newsroom was seized by a very, very strong rolling action. It was quite frightening."

At Vandenberg Air Force Base, a key US missile base south of epicentre, officials said the installation had suffered minor structural damage, including water and gas leaks, but no deaths or injuries.

Frank Warren from San Luis Obisbo said he was cleaning his children's room when felt whet he thought was a big truck was going down the street outside.

"Then I realized that it was no truck. The whole house started rocking and rolling. I got under the door-jam and rode it out. The Christmas decorations were swinging, it was wild."

The USGS reported well over 40 aftershocks measuring as much as 4.7 and 3.3 on the Richter Scale in two hours following the first impact, but said no damage was reported at a nuclear power plant south of San Francisco.

But authorities said because the quake had struck in the mainly agricultural central coastal region of the most populous US state, a major catastrophe had been averted. Around 250,000 people live in the area.

USGS officials said the quake had hit on a previously unknown fault that lies near the notorious San Andreas fault that bisects the quake-prone state and has caused havoc over the years.

"It was big," MaryAnne Carson of the chamber of commerce in Cambria, near San Simeon told local media. "Doors opened and things fell off the shelves, but I haven't see any damage as of yet."

Police in the city of Santa Barbara, about 150 kilometers south of the epicentre, said the quake was clearly felt on the town, but no damage or injuries were reported.

TERRA.WIRE