By Shurna Robbins and Alan Markoff
GEORGE TOWN, Nov 7 (Reuters) - Hurricane Paloma strengthened into a dangerously powerful storm in the Caribbean on Friday as it bore down on the wealthy British territory of the Cayman Islands and threatened storm-battered Cuba.
Businesses, schools and government offices closed down in the Cayman Islands, a major financial center, while residents shuttered their homes and visitors tried to flee as the late-in-the-season storm hurtled northward.
Paloma gathered power menacingly fast as it neared Grand Cayman Island and it became a "major," or Category 3 hurricane on the five-step Saffir-Simpson scale of storm intensity, with top sustained winds of 115 miles per hour (185 km per hour), late on Friday, the U.S. National Hurricane Center said.
"I have been through this so many times that a Category 2 or 3 doesn't really bother me anymore. Anything less than a Hurricane Ivan and I am not worried at all," said Paul Aiken, a Cayman businessman, referring to a ferocious 2004 hurricane that caused extensive damage in the territory.
Hurricane Katrina was a Category 3 when it came ashore near New Orleans in 2005 and swamped the low-lying U.S. city, but the the Cayman Islands and their solid structures are considered less vulnerable to the fierce tropical storms that churn through the Atlantic and Caribbean between June and the end of November each year.
Paloma doused Honduras with heavy rains as it formed on Thursday, adding to misery in the impoverished Central American country where the U.N. estimates 70,000 people have been made homeless by recent storms.
It posed no threat to U.S. oil installations in the Gulf of Mexico.
The hurricane was expected to reach Cuba late on Saturday, weakening somewhat before it does but delivering yet another climatological blow to a country that has already suffered $5 billion in damages from two hurricane strikes this year.
"It's a bad dream," said store worker Ofelia Hernandez in Cuba's Camaguey province, where the storm was expected to make landfall. "Barely two months and once again in checkmate."
The damage has come at a delicate time for Cuba as new President Raul Castro shepherds the communist country following the retirement of aging, and ailing, revolutionary leader Fidel Castro earlier this year, and as world economic woes force Cubans to tighten their belts.
Cuban officials said they had evacuated at least 85,000 boarding school students on Friday and would soon begin moving people from flood-prone areas.
By 7 p.m. EST (midnight GMT), Paloma was about 30 miles (50 km) south of the eastern end of Grand Cayman and moving north-northeast near 6 mph (9 kph), the Miami-based hurricane center said.
Rainfall totaling up to 15 inches (38 cm) was expected over parts of the Cayman Islands and its national weather service forecast waves rising up to 30 feet (9 metres), which would cause dangerous coastal storm surges.
The storm forced the postponement of a national festival known as Pirates Week, a major tourist draw. Many tourists already had cut short their vacations to evacuate.
"We're going to Cancun where it's sunny," said Steve Keith, a visitor who was married in Grand Cayman on Thursday and had intended to spend his honeymoon there.
Paloma came in the last month of what experts correctly predicted would be a busier than normal six-month storm season.
(Additional reporting by Jeff Franks, Nelson Acosta and Rosa Tania Valdes in Havana; Writing by Michael Christie; Editing by Eric Walsh)