Homes, hotels, and shopping centres have collapsed in the "extensive" damage, officials said.
More than 400 people have been confirmed killed, many swept away, as tsunami waves triggered by a massive quake crashed into the Indonesian island of Sulawesi.
Indonesian officials braced Saturday for a swiftly rising death toll following an quake and tsunami that hit the island of Sulawesi the day before, sweeping away buildings and burying its victims under collapsed rubble.
Strong aftershocks have continued to hit the Indonesian island of Sulawesi, where a major quake and tsunami killed at least 384 people and injured 500.
The number of casualties was no doubt increased by the fact that hundreds of people had descended on Palu's beach for a festival to celebrate the city's anniversary, due to start Friday night. Their fate was unknown.
Palu, which has more than 380,000 people, was strewn with debris from the quake and tsunami.
The natural disaster was initially measured at a magnitude of 7.5 but about 10 minutes later, another quake struck the area, with a magnitude of 5.8.
An AP reporter saw bodies partially covered by tarpaulins and a man carrying a dead child amid the wreckage.
"There is some speculation that there was a landslide under the sea which displaced a lot of water and caused the tsunami", he said, adding the narrow bay may have concentrated the force of the waves as they moved toward the shore.
Almost 400 people were killed after a powerful quake of magnitude 7.5 triggered a tsunami that struck the Indonesian island of Sulawesi. The most devastating came on Boxing Day in 2004, when a magnitude 9.5 quake triggered a massive tsunami that killed around 226,000 people along the shorelines of the Indian Ocean, including over 126,000 in Indonesia.
Nugrogo tweeted photos of local hospitals that are overflowing with the injured. "We are hoping for any help".
Hospitals were overwhelmed by the influx of injured, with many people being treated in the open air, while other survivors helped to retrieve the remains of those who died. Roads and infrastructure are poor in many areas, making access hard in the best of conditions. According to Sutopo Purwo, spokesman for the Disaster Management Agency, the death toll could climb in the next few days.
Tributes to Agung's bravery were led by Yohannes Sirait, spokesman for Air Navigation Indonesia, who said Agung's sacrifice had potentially saved the lives of hundreds of people. On Saturday, authorities were still having difficulties coordinating rescue efforts.
"Don't even think to find the inmates".
"We have not received comprehensive reports yet because communications are cut".
People in Central Sulawesi and West Sulawesi provinces were told to evacuate to higher ground, though it remains unclear as to whether people remained in their homes because of the contradicting government advice.
Sulawesi has a history of religious tensions between Muslims and Christians, with violent riots erupting in the town of Poso, not far from Palu, two decades ago.
The natural disaster has come a month after a trio of earthquakes hit several islands in the Sotuh Pacific and Indonesia, which is still recovering from the effects of an August 5 quake that killed more than 450 people.