Hurricane Paul raced toward Mexico's southern Baja peninsula Tuesday morning and was expected to make land within hours, prompting warnings for residents to stay inside, stock up on drinking water and avoid panic.

Heavy rain hit Cabo San Lucas on the southern tip of the peninsula, swamping some neighborhoods and leaving drivers stranded on flooded roads.

Hurricane Paul is expected to pass just west of the small Baja California resort of Loreto, but the chain of mountains that runs up the spine of the peninsula may shelter the tranquil bay somewhat. Residents said a steady rain was falling in Loreto Tuesday,

Pascal Pellegrino, the Italian-born manager of the Oasis Hotel, said "here in Loreto, we're protected by the mountains."

"We don't foresee any big concern," he said, noting there were relatively few tourists in Loreto at present, perhaps 400 or 500, and there were places for them to take shelter if needed.

"We are very well organized," he noted, saying the worst that hotel keepers feared was a cut in electrical power, because transmission lines lie in the storm's path.

The U.S. National Hurricane Center in Miami said Tuesday morning that Paul's maximum sustained winds had decreased to 105 mph (168 kph) and that the storm was centered about 70 miles (110 kilometers) south of Cabo San Lazaro, Mexico. The storm was moving north-northeast at 20 mph (32 kph) and was expected to hit land by Tuesday afternoon.

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 rain didn't scare many 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.

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 was in effect for north of Punta Abreojos to El Pocito.

In the Atlantic, meanwhile, Rafael reached hurricane strength late Monday south of Bermuda and was forecast to pass east of Bermuda by Tuesday afternoon or evening.