At least three people were killed and rescuers were looking for other victims Saturday after a large Italian cruise ship carrying more than 4,000 people ran aground overnight, took on water and tipped over.

A dramatic nighttime rescue operation involving lifeboats, ships and helicopters was continuing hours after the 114,500 gross tonnes Costa Concordia hit a sandbar near the island of Giglio as passengers were eating dinner.

We were sitting down do dinner and we heard this big bang. I think it hit some rocks. There was a lot of panic, the tables overturned, glasses were flying all over the place and we ran for the decks where we put on our life vests, passenger Maria Parmegiano Alfonsi told Sky Italia television.

The 290-metre-long ship took on water and started listing.

Pictures taken by rescued passengers after daybreak and broadcast on television showed the shiny, multi-story luxury vessel on its side and about half submerged on the sandbar just a few hundred metres (yards) from Giglio.

Coast guard Captain Luciano Nicastro and police official Giuseppe Lunardi said three people were confirmed dead, fewer than the six reported earlier by Italian media.

But, speaking on live television, Nicastro said rescue workers were still searching the ship, which had just started a winter Mediterranean cruise, and the waters around it.

Lunardi said some people had jumped off the ship while it was listing.

The rescue operation is still going on, Fire brigades official Luca Cari said on television about 10 hours after the accident.

He said rescue workers were still checking decks that remained above water and that scuba divers would then check the decks that have been submerged.

This is difficult because the ship is enormous, Cari said, adding that the ship was now listing at about 90 degrees but would likely remain in that position and not sink because of the sand below.

Most of the 3,200 passengers and 1,023 crew on board the ship had been evacuated to the island of Giglio and from there were being taken to the mainland.

Alfonsi said she and other passengers were first put up in churches on the island and later, with only some blankets to protect them from the cold, were later taken to the mainland.

Another unnamed coast guard official on television said the ship was believed to have suffered a large gash on its side.

Most of the passengers on board were believed to be Italian but the cruises are popular with foreigners too.

The cruise ship company said the cause of the incident was being investigated.

(Reporting By Philip Pullella; Editing by Matthew Jones)