(CNN) -- A storm has killed at least 16 people on the Italian island of Sardinia, with two people unaccounted for and fears the death toll will rise, officials say.
Confirming the deaths to CNN affiliate Sky TG24, Regional President Ugo Cappellacci described the situation as "dramatic" and "critical."
Italian Prime Minister Enrico Letta held a Cabinet meeting to declare a state of emergency in Sardinia. He told reporters the government has allocated 20 million euros ($27 million) in immediate aid to the Mediterranean island.
The money will be used to help save lives, assist the displaced and repair roads, he said.
Italian President Giorgio Napolitano issued a statement expressing solidarity with the affected communities.
Civil Protection Agency spokeswoman Francesca Maffini said that the two missing people were a farmer and a woman who lived alone. Both were in the province of Nuoro, she said.
Maffini told CNN the island had received six months' worth of rainfall -- 450 mm (more than a foot) -- in 12 hours.
Addressing lawmakers in Italy's Parliament on Tuesday, Environment Minister Andrea Orlando said the area had an average rainfall of 1,000 mm, and a similar deluge had not occurred there in centuries.
CNN meteorologist Brandon Miller said that while the worst weather had moved on from Sardinia, the island will still experience some showers and gusty winds over 50 kph through Wednesday as the storm system moves east in the Mediterranean Sea.
Italy's state news agency ANSA reported that flooding from the storm -- named locally as Cleopatra -- forced many people to flee their homes, with thousands seeking shelter in public facilities such as gymnasiums.
ANSA said a Brazilian family of four was among the dead: a mother, father and two teenage children drowned when a flash flood hit their ground-floor flat in Arzachena, near Olbia.
Olbia's councilor for tourism, Marco Vargiu, told CNN that the storm had been "a disaster" for the town of about 70,000, with authorities saying 13 people had died in the broader area.
Vargiu said the dead included two young babies. In one case, a father aged 35 and his 3-year-old son had died in flood waters near the town, he said.
"The worst conditions are here in Olbia. There are rivers of water in the town. In lots of houses the ground floors are full of water, one or two meters of water, and a lot of families have lost everything -- their house, their car, their clothes, the furniture."
Vargiu said the houses were filled with a mixture of water, sand and rubbish. "We have electricity, but the streets, the bridges have been washed away."
"My house has no damage, but just 15 meters away there are friends that have lost all their furniture, their car, because they were carried away by the rivers," he said. "Disasters like this have never happened. We don't remember a disaster like this."
But Vargiu said a lot of ministry staff and emergency workers had come to aid the town, and there were many volunteers helping its inhabitants.
"In Olbia there is a very, very good solidarity," he said. "We have two hospitals working hard overnight and today because they had a lot of people asking for help. There were a lot of accidents in cars, in houses, and some walls fell down."
Vargiu said a lot of money would be needed for Sardinia to recover from the storm, with many families and businesses affected.
The amount offered by the government might be enough to restore some of the town's connections to the rest of the island, he said, but it was not enough long term.
"It's very difficult to count the financial cost to the town, the houses. The economy of the town has received a big damage. I don't think it's enough."
Italy's Civil Protection Agency said 2,500 people have been displaced and more than 10,000 people are without electricity. The agency is still trying to reach all the areas affected, it said in a statement.
Widespread flooding and landslides have blocked roads, and the agency urged motorists to drive only when necessary and to check road conditions before beginning a journey.
The agency said the bad weather started in the Campidano area, in southwestern Sardinia, then spread across the rest of the island, with the worst affected provinces Olbia and Nuoro.
Olbia's port remains operational, and the airport is partially open, it said.
The coast guard said there had been reports of flooding in other parts of Italy, particularly near the city of Catanzaro, in the southern region of Calabria, and in Venice during the high tide.