Thousands of people fled low-lying areas as the strongest cyclone to threaten the Arabian Peninsula in 60 years blasted Oman's eastern coast early Wednesday with strong winds and waves, Civil Defense officials said.

Southern Iran and the oil-rich Persian Gulf were next in its path.

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Cyclone-force winds of Gonu, which had been churning northwest through the Indian Ocean, reached the Omani coastal towns of Sur and Ra's al-Hadd. Civil Defense said the storm was dropping heavy rains on the capital, Muscat, and other nearby towns, but it was not known if the storm was causing any damage.

Cyclone Gonu had weakened somewhat during the day but was still packing winds of up to 106 mph and churning up ocean waves of several feet, the officials said.

At 2200 GMT Tuesday, Cyclone Gonu was centered just off central Oman, about 140 miles southeast of Muscat, and was traveling along the coastline at about 8 mph, according to the U.S. military's Joint Typhoon Warning Center, a U.S. military task force that tracks storms in the Pacific and Indian oceans.

Heavy rains pelted Muscat early Wednesday, and streets were empty as most people stayed indoors, said blogger Vijayakumar Narayanan in a telephone interview.

"Everyone is cocooned in their houses," said Narayanan, whom NowPublic.com reached out to in Oman. NowPublic.com is a journalism Web site with 98,000 members in 3,500 communities worldwide. "Shops and businesses are closed."

Narayanan said city streets were quickly becoming flooded, but there were no reports of wind damage.

He said the storm has alarmed many Omanis, unaccustomed to cyclones. "They haven't had this kind of fear before."

Gonu was expected to skirt the region's biggest oil installations but could disrupt shipping in the Straits of Hormuz, causing a spike in prices, oil analysts said.

Oil prices rose on Monday but retreated Tuesday, although the storm weighed heavily on the market.

"If the storm hits Iran, it's a much bigger story than Oman, given how much bigger an oil producer Iran is," said Antoine Haff of FIMAT USA, a brokerage unit of Societe Generale. "At a minimum, it's likely to affect tanker traffic and to shut down some Omani oil production as a precautionary measure."

Gonu, which means a bag made of palm leaves in the language of the Maldives, is expected to hit the east coast of Oman and head to the Gulf of Oman, according to AccuWeather.com meteorologist Donn Washburn. The cyclone was expected to hit land in southeastern Iran late Wednesday or early Thursday, Washburn said. According to satellite images of the storm, it did not appear that Gonu's eye had crossed over Oman early Wednesday, though its outer bands were over the coast.

The Joint Typhoon Warning Center predicted rough seas in the Straits of Hormuz, the transport route for two-fifths of the world's oil and the southern entrance to the Gulf.

The center predicted Gonu would churn up waves of up to 36 feet.

In Tehran, the government's Department of Meteorology predicted heavy rain and strong winds along Iran's southeastern coast. Storm warnings had been issued and some damage was expected, the department said.

On Tuesday, as the cyclone approached, authorities evacuated nearly 7,000 people from Masirah, a lowland island off the east coast of Oman, according to Gen. Malik bin Suleiman al-Muamri, head of the country's civil defense. Oman's main international airport in Muscat was also closed.

Masirah Island includes one of four air bases that the Omani government allows the U.S. military to use for refueling, logistics and storage, although little has been revealed publicly about U.S.-Oman military ties.

The Masirah base hosted U.S. B-1B bombers, C-130 transports and U.S. Special Forces AC-130 gunships during the war in Afghanistan, and the United States has continued to have basing rights on the island.

On Masirah, authorities said a state of emergency had been declared. Troops and police were mobilized to help provide shelter and medical services.

Oman's major oil installations, which were not directly in the storm's projected path and nowhere near as extensive as those of its neighbors, continued operations but took precautions as Gonu approached.

In neighboring Saudi Arabia, the government said the country and oil markets would not be seriously affected by the storm.

But some oil analysts said the storm could have a damaging effect on the oil market.

Manouchehr Takin, an analyst at the Center for Global Energy Studies in London, said the real fear is that the loading of tankers might be delayed by the storm.

"About 17-21 million barrels a day of oil are coming out of the Persian Gulf. Even if only some of the tankers are delayed, that could reduce the supply of oil and increase prices," Takin said.

Even with the weaker wind speeds, Gonu is expected to be the strongest cyclone to hit the Arabian Peninsula since record keeping started in 1945.

A cyclone is the term used for hurricanes in the Indian Ocean and Western Pacific.

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