The death toll from Italy’s powerful earthquake has risen to 281, with hopes fading of finding more survivors.

Three days after the quake struck the mountainous heart of the country, the rescue operation has been called off in some of the most stricken areas.

Sniffer dogs and emergency crews continue to scour the town of Amatrice, which was levelled in the disaster, but there is 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,” town mayor Sergio Pirozzi said on Friday, adding around 15 people, including some children, had not been accounted for.

In nearby villages, such as Pescara del Tronto, rescuers pulled out after all the inhabitants had been accounted for.

Italy plans to hold a state funeral for around 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 mast around the country for the dead, who include a number of foreigners.

The civil protection department in Rome said 388 people were being treated for injuries in hospitals, and 40 of them were in critical condition.

Bystanders were warned to leave Amatrice because of aftershocks. Photo: AP

An estimated 2,500 people were left homeless by the most deadly quake in Italy since 2009.

The government has promised to rebuild the region, but some local people fear that won’t happen.

More than 1,050 aftershocks have hit the area since the 6.2 magnitude quake early on Wednesday, bringing fresh damage to structures still standing.

These included a bridge leading to Amatrice, which had to be closed on Friday, further complicating the rescue operation.

The original quake was so strong that the town nearest the epicentre, Accumoli, sank by 20 cm, according to Italy’s geological institute.

The foreigners who died in the disaster included six Romanians, a Spanish woman, a Canadian and an Albanian.

Victims sit among the rubble of a house in Amatrice. Photo: Getty

Three British holidaymakers, including a 14-year-old boy, also died.

The first funeral of a victim was held in Rome on Friday, for Marco Santarelli, the 28-year-old son of a senior state official, who died in the family’s holiday home in Amatrice.

Prime Minister Matteo Renzi has declared a state of emergency for the region, allowing the government to release an immediate 50 million euros ($A74 million) for the 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.

Italy sits on two fault lines, making it one of the most seismically active countries in Europe.

WITH AAP