LOS CABOS, Mexico -- It was raining, but that didn't scare tourists on Mexico's southern Baja peninsula who saw the impending arrival of Hurricane Paul as a minor inconvenience.

Some went to Medano Beach on Monday to watch the heavy surf. Anthony Curtis of San Diego went for a stroll with his wife.

"It's only rain falling from the clouds," he said. "The hotel told us not to worry."

Paul weakened to a Category 2 storm in the eastern Pacific late Monday as it swirled near Mexico's western coast.

Early Tuesday, the U.S. National Hurricane Center in Miami said that Paul's maximum sustained winds had decreased to 110 mph (175 kph) and that the storm was centred about 200 miles (325 kilometres) south of Cabo San Lazaro, Mexico. The storm was moving north-northeast at 20 mph (32 kph).

Still, the state government canceled school, prepared shelters and urged resident to stay informed.

"We don't intend to alarm people unnecessarily," said Gov. Marcos Covarrubias Villasenor. "Rather we want citizens to be aware, don't cross streams unnecessarily, and stay in your homes if you don't need to leave to avoid creating traffic. The forecast is for heavy amounts of rainfall in most of the state."

The Mexican government extended its hurricane warning for the west coast northward to Punta Abreojos. The hurricane centre said the centre of Paul should move inland along the coast by Tuesday night and be near or over the central Baja peninsula on Wednesday.

The hurricane was expected to continue to weaken Tuesday, the hurricane centre said.

Paul is on track to bypass the heavily populated tourist areas of Los Cabos at the tip of the peninsula, and the capital, La Paz, on the eastern Gulf of California. But the state government as a precaution readied 143 shelters that could take up to 35,000 people in the tourist zone. Classes were suspended for Tuesday statewide, and ports were closed to small vessels in the capital, La Paz, Los Cabos and Comondu.

The storm was forecast to brush Baja's Pacific coast farther north near Puerto San Carlos, a sparsely populated area of fishing villages, before turning northward along the coastline. The outer cone was forecast to pass over the entire peninsula farther north in the towns of Meluge, Comondu and Loreto.

State civil protection authorities said they had sent advance teams from the federal electricity and water commissions to help maintain services during the storm.

A hurricane warning was in effect for the western coast from Santa Fe north to Puerto San Andresito, and a tropical storm warning on Baja's western flank from north of Puerto San Andresito to Punta Abrejojos and also from Agua Blanca to south of San Fe. A tropical storm watch is in effect for north of Punta Abreojos to El Pocito.

In the Atlantic, meanwhile, Rafael reached hurricane strength late Monday south of Bermuda.

The hurricane center said Rafael's top sustained winds had risen to near 85 mph (140 kph), making it the ninth hurricane of the Atlantic season.

Early Tuesday, Rafael was centred about 395 miles (635 kilometres) south of Bermuda. It was moving north-northeast at 16 mph (26 kph) and forecast to pass east of Bermuda by Tuesday afternoon or evening.