Forecasters were upbeat early Monday Hurricane Michelle's passage might do less damage to South Florida and the Florida Keys than they feared before the storm crossed Cuba en route to the Bahamas.

"The good news is this: It looks like Michelle is just giving us a fringe effect, I would not expect any significant damage" for Florida, said Max Mayfield, director of the U.S. National Hurricane Center in Miami.

"The only thing I can see happening," Mayfield said, "is if the rain bands move on shore together with tropical storm-force winds."

However, those rain bands, swirling just 10 miles offshore after midnight, could still cause coastal flooding. Worse, they could bring more of the beach erosion that unrelated offshore winds last week brought to much of South Florida's Atlantic coastline.

"This is not really anything big for us," said a Key West bartender, Patrick Winters, as a light rain zigzagged down, blown by repeated gusts of strong wind.

Winters, 24, was wading barefoot in foot-deep water down a flooded downtown street after midnight Monday, taking photos of waves crashing on this island city's southernmost tip, the southernmost point in the continental United States.

At the same hour, Paul Altamuro, general manager at Rick's & Durty Harry's bar, was still working the outdoor bar, protected from the elements only by a wooden awning.

About 200 patrons were served at the bar Sunday evening as Michelle was just over 100 miles away making its way northeast across Cuba toward the Florida Straits that separate the island nation from the Keys.

The destructive center of the storm was expected to miss the Keys and South Florida, though the system's outer rain bands were expected to buffet the region through much of Monday.

Most of those stopping by Rick's and Durty Harry's for outdoor refreshment in the flooding rains were locals, Altamuro said, "with cabin fever.

"You've gotta figure the people that are sticking around here are pretty odd."

At 1 a.m. EST Monday, Hurricane Michelle was centered over north central Cuba near 23.1 north latitude, 80.3 west longitude, or about 190 miles south of Miami.

At the same time, the hurricane warning for the Florida Keys was downgraded to a tropical storm warning, the tropical storm warning for the west coast of southern Florida south of Bonita Beach was discontinued, and the tropical storm warning on the Atlantic coast north from the Keys to Jupiter Inlet was kept in effect.

In Key West, Michelle's highest gust Sunday was just 47 mph, far below hurricane force winds that start at 74 mph. Total rainfall from Michelle for the city through Sunday was 2.4 inches.

"We're in wind down mode here," said Dave McGinnis, a meteorologist with the National Weather Service in Key West.

In Marathon, in the Middle Keys, only 1.55 inches of rain fell.

"We can shrug that off," McGinnis said.

While the lower Keys were considered past the worst of Michelle's effects, more rain bands should hit the middle and upper Keys, and Miami-Dade and Broward counties to the north, according to Richard Knabb, a meteorologist at the hurricane center.

Schools and most government services were canceled for Monday in the Keys' Monroe County and in Miami-Dade County. Miami-Dade, which ordered evacuation of only a few low-lying areas, had some schools open as Red Cross public shelters.

Monroe County early Sunday staged a mandatory evacuation for all Keys residents, only to modified that order later, telling anyone still on the island chain off the southern tip of Florida they could stay.

That was after Gov. Jeb Bush declared a state of emergency Saturday.

There was no official word by early Monday when Keys residents who chose to leave could return, though Craig Fugate, director of the state's Division of Emergency Management, said Sunday the "all-clear" could be given as soon as Monday.