A powerful 6.7 magnitude earthquake shook Mexico on Saturday, killing at least two people, knocking out lights in parts of the capital and sending people rushing into the streets.

There were no immediate reports of severe damage or injuries in Mexico City but emergency services said one person was killed when a house collapsed in Iguala, a small city between the capital and the tourist resort of Acapulco.

Another person was killed when a rock fell on a small van on the Mexico City-Acapulco highway.

A severe earthquake in 1985 killed thousands of people and wrecked parts of Mexico City, and many residents live with the fear of a repeat.

Shoppers at a popular department store in the Condesa district rushed out to the street, some of them crying and shouting, and traffic lights were out at several intersections, causing traffic jams.

The epicenter of the quake was in the southwestern state of Guerrero, 28 miles (45 km) from Iguala, and was 40 miles (64 km) deep, the US Geological Survey reported. It was felt in other states including Michoacan, Puebla and Hidalgo, local media reported.

'The most damage was in Iguala because the epicenter was very close to there,' a spokesperson for Guerrero emergency services said.

Landslides had closed highways in the Pacific coast state but the duty fire officer in Acapulco said that while residents of the port city felt the earthquake, there were no reports of damage.

Power was knocked out in many districts of the capital and one building was evacuated, but Mexico City Mayor Marcelo Ebrard said water services, the subway and the airport were working normally.

'The city center is fine, there are people skating on the ice rink,' Mexico City emergency services spokesman Manuel Mondragon said of the winter entertainment set up in the central Zocalo square. 'At the moment, there is no reason for concern.'    

A source from phone operator Telcel said services went out briefly in some sections of the city as the mobile network was overloaded with people trying to call family and friends.

State oil monopoly Pemex, which has few installations on the Pacific coast, said there were no reports of damage. - Reuters