Hundreds of bodies are washing up along the shore in Japan's northeast, as officials struggled to retrieve the dead and provide relief to thousands of homeless survivors.

Local officials say they have lost contact with about 30,000 people as the country faces what Prime Minister Naoto Kan calls its greatest crisis since World War Two.

There is a sense of urgency among rescuers as the weather forecasts call for temperatures just above freezing. There is also worries that rain could cause deadly mudslides.

The number of homeless following last week's magnitude-9.0 earthquake and subsequent tsunami has been pegged as high as 550,000.

Hospitals are overwhelmed with the injured and running out of medicine and supplies, while millions of people have been without food, water, heat or shelter for days.

So far the official death toll is at 2,414, but Japanese officials have predicted that number could rise to around 10,000.

On Monday morning, Japan's Kyodo News reported the grim discovery of 2,000 bodies on two shorelines in Miyagi prefecture.

The police chief in Miyagi has said the death toll in that prefecture alone could reach 10,000.

In Minamisanriku, 785 bodies had been recovered by noon local time on Monday, local police told Kyodo News.

In Soma, in neighbouring Fukushima prefecture, officials say the town is at least one-third flooded and thousands of residents are missing. The local crematorium was unable to handle the large number of bodies being brought in for funerals.

"We have already begun cremations, but we can only handle 18 bodies a day. We are overwhelmed and are asking other cites to help us deal with bodies. We only have one crematorium in town," Katsuhiko Abe, an official in Soma, told The Associated Press.

CTV's Lisa LaFlamme said due to the rising death toll, the Japanese government has waived a rule that requires citizens to get approval from their local officials before they cremate or bury a body.

"The current situation is so extraordinary, and it is very likely that crematoriums are running beyond capacity," said Health Ministry official Yukio Okuda. "This is an emergency measure. We want to help quake-hit people as much as we can."

Rescue workers were trying to recover up to 300 bodies in Sendai, the capital of Miyagi.

Another 8,000 people in Otsuchi, in Iwate prefecture, are said to be unaccounted for.

Hajime Sato, a local government official in Iwate, said only 10 per cent of needed supplies have arrived in the area, and body bags and coffins are in such short supply they may have to be brought in from outside the country.

Casey Calamusa, of World Vision, said the organization is attempting to get basic survival necessities into the hardest-hit regions.

"Some of the greatest needs are food and water, temporary shelter, and World Vision will also be focusing on children and the psychological toll that this earthquake has had by setting up child-friendly spaces for them," he told CTV News Channel from Tokyo.

Japan's ambassador to Canada, Kaoru Ishikawa, said Monday the devastation is so broad that it will be difficult for foreign relief teams to help.

Normally in a disaster situation, local municipalities welcome international aid teams and help them reach the hardest-hit areas. But several days after the disaster, he said, there are still many areas where local officials have been completely silent, suggesting entire communities were obliterated.

"Even the local authorities unfortunately are gone, and local inhabitants as well. So this is a very unusual situation which not many countries have ever seen, certainly not one my country has ever seen before," the ambassador told CTV's Canada AM from Ottawa.

CTV's Tom Walters said it has been difficult for officials to accurately estimate the number of dead.

"There are concerns the death toll is going to be very much greater than what has been officially stated at this point and I think there's just a general sense that there is no calculation yet of the terrible human cost of this tragedy," Walters told CTV News Channel from Tokyo.

Recovery efforts continued across Japan Monday but agencies were struggling with myriad challenges.

Power rationing was in place in some areas, there were ongoing nuclear concerns, and infrastructure such as roads and bridges has been wiped out in many areas.

Public broadcaster NHK estimated that more than 400,000 people are in emergency shelters, which are running low on food, water and other badly needed supplies.

"Don't forget what's happening for the people who survived the quake but are up there in emergency shelters with very little food, running out of water, no gasoline," LaFlamme told CTV's Power Play. "There may be indeed so many more survivors there, but there's no power, so none of them have any access to cellphone service to even get those messages out. So there's so much uncertainty now. It's really difficult to even get a handle on the scope of this disaster."

Kyodo News reported Monday that 63,255 buildings were either partially or completely destroyed by the dual earthquake and tsunami.

In addition, Japan's stock market plummeted on Monday, the first business day after last week's catastrophe. The Nikkei Index dropped 6.2 per cent, or 634 points, its lowest point in months.

Northeastern Japan, the region hardest hit by the quake and tsunami, has experienced more than 150 aftershocks since the initial temblor.