AFP

Country Fire Authority staff monitor a giant blaze raging Saturday in Bunyip State Park near Labertouche, 125 kilometres west of Melbourne.

SYDNEY - At least 65 people were killed and entire towns razed in one of the worst wildfire disasters in Australian history, sending thousands fleeing in scenes Prime Minister Kevin Rudd compared to "hell" Sunday.

The toll, already the highest in 26 years, looked set to rise further as medics treat badly burned survivors and police sift through more than 640 homes destroyed by the fires some have blamed on arsonists.

Thousands of survivors jammed community halls, schools and other makeshift accommodations as troops and firefighters battled to control huge blazes.

"Hell in all its fury has visited the good people of Victoria in the last 24 hours. Many good people lie dead, many injured," Rudd told reporters, deploying army units to help 3,000 firefighters battling the flames.

The fatalities, all in Victoria state, exceeded the worst expectations of police, who reported 14 deaths shortly after the fires flared late Saturday.

The number of dead rose steadily throughout Sunday as rescue crews reached townships that bore the brunt of the most intense firestorm northwest of Melbourne, which survivors likened to a nuclear bomb.

"It was a most horrible day. It's going to look like Hiroshima, I tell you. It's going to look like a nuclear bomb," said Chris Harvey, a resident of Kinglake, one of the worst-affected towns.

Many people apparently died in their cars as they attempted to escape the inferno, while others were caught in their homes.

The fires flared late Saturday, fanned by high winds following a once-in-a-century heatwave that sent temperatures soaring to 46 degrees Celsius, and continued to burn out of control Sunday.

Rescue services were also fighting huge blazes to the north in the state of New South Wales.

At least two children were among the dead, while Melbourne's Alfred Hospital admitted 20 people suffering serious burns.

"Unfortunately, there are some who will not survive," trauma specialist John Coleridge told reporters.

Australia's deadliest bushfires killed 75 people in Victoria and in neighbouring South Australia in 1983.

But officials said current conditions were even worse. AFP