* State of emergency after Italian quake kills 130
* Rain slows night-long search for trapped survivors
* Italy's worst quake since 1980 wipes out towns, villages
* Up to 50,000 people may be homeless
By Deepa Babington
L'AQUILA, Italy, April 7 Rescuers searched through the night for survivors of an earthquake that killed more than 130 people in central Italy early on Monday and left thousands of homeless huddled in tent camps and rough shelters.
Rain complicated the task of firemen and emergency workers combing the rubble in the hope of plucking people alive from collapsed houses in the medieval mountain city of L'Aquila and nearby villages, some almost entirely destroyed.
The quake struck shortly after 3.30 a.m. (0130 GMT) on Monday, catching residents in their sleep and flattening houses, ancient churches and other buildings in 26 cities and towns.
Aftershocks rattled the area, some 100 km east (60 miles) of Rome in the Abruzzo region, throughout the day.
Local authorities said more than 130 people were confirmed dead and more than 1,500 injured. The civil protection agency put the number of homeless at up to 50,000.
Hospital sources told ANSA news agency more than 150 people had died, while the website of the daily Corriere della Sera said 250 people were still missing, raising fears that the death toll could rise substantially.
"It's been such a hard and long day. Now that we are sitting here in our car it's all beginning to sink in," said L'Aquila resident Piera Colucci as she prepared to sleep in her vehicle.
Rescue workers using powerful floodlights and bulldozers said they would keep searching for survivors through the night. After digging in the rubble all day, a fireman recounted how he had pulled a boy alive from the mangled remains of his house.
"All we could see was his head sticking from the rubble, his entire body was buried. We kept digging, picking piece by piece of debris and we finally managed to get him out -- when we did the fatigue was great but so was our joy," he said.
Thousands of tents were put up in parks and on football pitches to shelter the homeless for the night and hotels on the Adriatic coast were requisitioned.
"DON'T GO BACK TO YOUR HOUSE"
Prime Minister Silvio Berlusconi declared a national emergency and flew to the disaster zone, cancelling a trip to Moscow. He later said his cabinet was providing 30 million euros ($40 million) for immediate assistance and expected a special European Union fund to contribute hundreds of millions more.
"Tonight, don't go back to your houses, it could be dangerous," he said in a message to residents broadcast on state television.
Shaken survivors described the quake striking them like a bomb in the middle of the night and the anguish of not knowing the fate of loved ones.
"I only remember this huge rumble and then someone dragged me out, but I don't know what happened to my wife and three-year-old son," said 35-year-old Stefano Esposito.
Most of the dead were in L'Aquila, a city of 68,000, where streets were strewn with rubble and old buildings crumbled like straw houses. Some nearby towns were all but destroyed.
In the village of Onna, which counts 250 residents, at least 24 people died. Wooden coffins were placed on communal ground.
As messages of condolences poured in from across the world, usually squabbling Italian politicians put aside their rivalries and united in mourning.
But there was still room for controversy. Weeks before the disaster, an Italian scientist had predicted a major quake around L'Aquila, based on concentrations of radon gas found around seismically active areas.
He was reported to police for "spreading alarm" and was forced to remove his findings from the Internet. Civil Protection assured locals at the end of March that tremors being felt were "absolutely normal" for a seismic area. (Writing by Silvia Aloisi; additional reporting by Reuters Rome bureau; editing by Tim Pearce)