NEW ORLEANS -- The Army Corps of Engineers says the federal flood protection system that protects New Orleans should hold up as Hurricane Gustav hits west of the city.

Spokesman Rene Poche said Monday the Corps doesn’t expect any storm surge flooding. The report came as other officials around New Orleans offered early reports that levees were holding.

The water was rising in the city’s Industrial Canal, occasionally splashing up against the edge. But St. Bernard Parish President Craig Taffaro said the water is being contained by the flood walls along the canal.

Levee experts cautioned against celebrating early, since early reports during hurricanes Katrina and Betsy mistakenly said flooding was not a problem. A hurricane’s winds can push surge shoreward for hours after a hurricane makes landfall.

Earlier in the morning, a weakened Hurricane Gustav closed in on the flood-prone coastal portion of the state, bringing wind and sheets of rain.

The brunt of the storm veered away from New Orleans, where there were only a few holdouts and those that refused to abandon Bourbon Street.

Gusts snapped large branches from the majestic oak trees that form a canopy over St. Charles Avenue. Tens of thousands were without power in New Orleans and other low-lying parishes, but officials in said backup generators were keeping city drainage pumps in service.

 “We don’t expect the loss of life, certainly, that we saw in Katrina,” Federal Emergency Management Agency Deputy Director Harvey E. Johnson told The Associated Press. “But we are expecting a lot of homes to be damaged, a lot of infrastructure to be flooded, and damaged severely.”

On the high ground in the French Quarter, nasty winds whipped signs and the purple, green and gold Mardi Gras flags hanging from cast-iron balconies. Like the rest of the city, the Quarter’s normally boisterous streets were deserted save for a police standing watch every few blocks and a few early-morning drinkers in the city’s famous bars.

“We wanted to be part of a historic event,” said Benton Love, 30, stood outside Johnny White’s Sports Bar with a whiskey and Diet Coke. “We knew Johnny White’s would be the place to be. We’ll probably switch to water about 10 o’clock, sober up, and see if we can help out.”

FEMA estimated there were only about 10,000 people left in the city, and the state said about 100,000 remained on the coast.  Nearly 2 million people answered the call to leave south Louisiana in the days before Gustav’s arrival, a massive evacuation effort designed to avoid the nearly 1,600 deaths suffered when Hurricane Katrina struck an unprepared Gulf Coast in 2005.

Police superintendent Warren Riley said there had been no reports of looting or calls for rescue. Public officials sternly warned in the days leading up to the storm that anyone leaving their homes after a dawn-to-dusk curfew was imposed would be swiftly thrown behind bars.

“We’re determined to keep this city safe for our people,” he said.

Evacuees watched television coverage from shelters and hotel rooms hundreds of miles away, praying the storm would pass without the exacting the deadly toll as Katrina, which killed more than 1,600 along the Gulf Coast.

“We’re nervous, but we just have to keep trusting in God that we don’t get the water again,” said Lyndon Guidry, who hit the road for Florida just a few months after he was able to return to his home in New Orleans. “We just have to put our faith in God.”

AP Photo

A man who would only give his name as Chris, drinks a beer outside a bar on Bourbon Street in the French Quarter as Hurricane Gustav approaches the Louisiana area, Monday, Sept. 1, 2008, in New Orleans.

Harmonica player J.D. Hill said he was standing in line Monday morning to get into a public shelter in Bossier City in northwest Louisiana after waiting on a state-provided evacuation bus that carried him to safety.

Hill was the first resident of the Musicians’ Village, a cluster of homes Harry Connick Jr. and fellow New Orleans musician Branford Marsalis built through Habitat for Humanity after Hurricane Katrina. The village provides affordable housing for musicians and others who lost their homes in Katrina’s flooding.

He described a frustrating scene outside the shelter, where elderly evacuees and young children had to wait to be searched and processed before going inside.

“There’s the funky bus bathrooms, people can’t sleep, we’re not being told anything. We’re at their mercy,” he said.

Gustav killed at least 94 people as it tore through the Caribbean before moving into the oil-rich Gulf. Billions of dollars were at stake, as Gustav threatened industries ranging from sugar to shipping. If production is significantly interrupted from the region’s refineries and offshore oil and gas platforms, price spikes could hit all Americans at the pump.

Officials promised they were ready to respond this time.  Homeland Security Secretary Michael Chertoff said search and rescue would be the top priority once the storm passed: high-water vehicles, helicopters and fixed-wing planes, Coast Guard cutters and a Navy vessel that is essentially a floating emergency room were posted around the strike zone.

“It’s amazing. It makes me feel really good that so many people are saying, ‘We as Americans, we as the world, have to get this right this time,”’ New Orleans Mayor Ray Nagin said. “We cannot afford to screw up again.”

Even presidential politics bowed to the storm, as the Republican Party scaled back its convention plans in deference to Gustav’s threat. Battered by criticism that the government’s response to Katrina was inadequate, President Bush scrapped his Monday appearance at the convention and instead headed to Texas to monitor the storm.

Gustav weakened Monday to a Category 2 storm as its eyewall rolled onto land. Katrina made landfall as a strong Category 3, which has sustained winds of between 111 mph and 130 mph.

At 8 a.m. EDT, the storm’s center was located about 85 miles south of New Orleans and was moving northwest at 16 mph. It had top sustained winds of 110 mph.

The city of Franklin, about 100 miles west of New Orleans, was bracing for a direct hit if Gustav stays on its current track.  Dozens of sheriff’s deputies, along with state troopers and guardsmen, waited at an emergency operations center inside the courthouse.

“We don’t rely on backup. If it comes, great, but we don’t trust the federal government. They can never get it quite right,” said state Rep. Sam Jones.

He estimated that at least three-quarters of the city’s roughly 9,000 residents evacuated. For good reason: Three years ago, Hurricane Rita flooded up to 200 homes in the city.

In Plaquemines Parish, south of New Orleans, officials built an emergency levee to prevent flooding along a highway that runs along the Mississippi River, sheriff’s spokesman Maj. John Marie said.

But it was extremely quiet. “It’s really remarkable, we got almost everybody out,” he said.

In New Orleans, officials were anxiously watching to see what kind of storm surge the city would face: If forecasts hold, the city could experience a storm surge of only 4 to 6 feet, compared to a surge of 10 to 14 feet at the site of landfall, said Corey Walton, a hurricane support meteorologist with the National Hurricane Center.

Katrina, by comparison, brought a storm surge of 25 feet, causing levees to break. While the Army Corps of Engineers has shored up some of the city’s levee system since then, fears this time center on the city’s West Bank, where levee repairs have not been completed.

Gustav was the seventh named storm in the Atlantic hurricane season. The eighth, Tropical Storm Hanna, was strengthening about 100 miles from the Bahamas. Though a storm’s track and intensity are difficult to predict days in advance, long-term projections showed the storm could come ashore along the border of Georgia and South Carolina late in the week.