About 42 people including many elderly and children were killed in Malaysia on Sunday by huge tsunami waves caused by a powerful earthquake in Indonesia, officials said.

Many more people, mainly picnickers and fishermen, were missing from the worst-hit area on the holiday resort island of Penang, the rescue officials said.

Penang Traffic Police Chief Wan Abdullah told AFP that 32 bodies had been found on the island, adding that "we expect to recover more bodies."

The official Bernama news agency said at least 10 bodies were found in neighbouring Kedah state.

In Penang, along the Tanjung Tokong road where land reclamation work was taking place, two five-metre-long fishing boats were flung about 13 metres by the huge wave onto a road.

"The boats smashed into concrete divider of the four lane road," one security official told AFP .

Nearby houses were also damaged by the waves and the roads were filled with mud.

15 minutes of pounding

Faizal Inwar, 30, a trader said early Sunday there were some tremors on the island.

"At midday, as I drove by the coast (on the northern Penang side), there was this rare sight of white colour on the surface of the water and it was bubbling," he told AFP .

"Then huge waves some six meters high pounded the shore for some 15 minutes. There were many people on the beach before the waves, after that it was empty," he said.

Faizal said he found a woman on the beach after the tsunami ended and tried to resusitate her but failed.

"There was grey colour mud in her mounth. She was dead. There water which is usually blue was all grey and black," he said.

Another eyewitness, Shahnaz Khan, 29, a bank officer said he was driving along the winding coastal road, when he noticed the white foam like colouring on the water surface.

"A lot of people were running out of the beach. But they were too late. Many did not have a chance at all. The high waves swallowed many into the sea. One father was frantically looking for his child," he said.

Unprecendented disaster

Along the Kuala Muda coast of Kedah state bordering Thailand, 10 people died when a tsunami roared through several villages, Bernama said.

A police spokesman said a four-to-six-metre high wave destroyed about 1,000 houses and affected about 5,000 people, it said.

Deputy Prime Minister Najib Razak who would visit Penang on Monday described the tidal waves as "a disaster never seen before in Malaysia's history."

He said he had ordered evacuations from high risk areas as a precautionary measure and would visit the affected areas on Monday.

The areas hit by the tidal waves are in northwestern Malaysia, separated by the Malacca Strait from Indonesia's Sumatra island where the quake hit early Sunday.

Tremors in KL

In the capital Kuala Lumpur, about 240 kilometres south of Penang, the tremor was felt by some people in high rise buildings, including hotels adjacent to the Petronas Twin towers, until recently the highest buildings in the world.

A member of staff at the Hotel Nikko, near the towers, said she had received many enquiries from alarmed hotel guests.

"They felt the tremors and thought the hotel building would collapse," she said.

At least nine states on the Malaysian peninsula felt the tremors early on Sunday, Low Kong Chew, director of Malaysia's meteorological services seismology division, said in a statement.