VIAREGGIO, Italy, June 30 (AP): A rail car filled with liquefied natural gas exploded when a freight train derailed in the middle of a small Italian town, setting off an inferno that killed at least 13 people and injured 50 others, officials said Tuesday.

The rear of the train plowed into a residential neighbourhood beside the rail station in the Tuscan seaside town of Viareggio shortly before midnight Monday, and the resulting explosion collapsed at least two buildings and set fire to a vast area.

Some 300 firefighters were digging through the rubble of collapsed or burnt homes looking for casualties, amid fears that there could be more victims. As the firefighters worked to contain the blaze, teams specialised in dealing with nuclear, biological and chemical threats were being brought in to prevent the other gas tanks from exploding.

Officials said the fire was contained after several hours, but a smell of burning hung in the air.

"We saw a ball of fire rising up to the sky," said witness Gianfranco Bini, who lives in a building overlooking the station. "We heard three big rumbles, like bombs. It looked like war had broken out."

Seven people, including a child, were killed in their homes by the collapses or the fire, said Raffaele Gargiulo, a police spokesman in the nearby city of Lucca, which is in charge of the smaller town of Viareggio.