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The storm was on the verge of hurricane strength and predicted to make landfall as early as Tuesday afternoon.
On current predictions, New Orleans lies directly in the path of Isaac.
But almost seven years to the day since the much stronger Hurricane Katrina struck, residents have been assured reinforced flood defences will hold.
Nonetheless, many are still scarred by the memory of the hurricane which killed more than 1,800 people, and queues of cars have been heading for higher ground at Baton Rouge.
Hurricane warnings are in place for a swathe of land - from Morgan City, Louisiana to the Florida-Alabama state line - at risk from the storm, which is more than 400 miles (645km) wide.
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President Barack Obama has declared a state of emergency in Louisiana, allowing federal funds to be released to local authorities.
The Republican Party convention will now open in Tampa, Florida on Tuesday after being delayed by a day.
Isaac killed at least 24 people in Haiti and the Dominican Republic, and the storm brought significant flooding and damage in the Caribbean.
Isaac was "on the verge of becoming a hurricane", the National Hurricane Center (NHC) said at 04:00 CDT (09:00 GMT), warning of a "significant storm surge and freshwater flood threat to the northern Gulf Coast".
The centre of the storm was located about 125 miles (205km) south-east of the mouth of the Mississippi River and was moving towards the coast at about 12 mph (19km/h).
Isaac can easily be seen from space
Maximum sustained wind speeds were near 70 mph, and the storm is predicted to strengthen into a category one hurricane - the lowest on the five-point hurricane scale, with winds of up to 90 mph.
The centre warned that a possible combined storm surge and high tide would cause flooding in coastal areas, with water potentially reaching 6-12 ft (1.8-3.7m) above ground in south-west Louisiana and Mississippi, 4-8 ft in Alabama and 3-6 ft in south-central Louisiana.
Isaac is also threatening heavy rainfall of as much as 18 inches (46cm) in some areas.
The bowl-shaped city of New Orleans is particularly vulnerable to storms, with the centre of the city the furthest below sea-level.
Residents are hoping that billions of dollars spent on reinforcing flood defences that failed catastrophically in 2005 would hold this time.
Officials have not ordered any evacuations, telling residents to reinforce their homes and stock up on supplies instead.
"It's going to be all right," said New Orleans Mayor Mitch Landrieu.
But in Houma, a city south-west of New Orleans, Simon and Crystal Naquin took refuge in an auditorium-turned-shelter, saying they were afraid their camper could flood.
Mr Naquin said he used to ride out hurricanes when younger, but not since seeing the damage wrought by hurricanes Andrew, Katrina and Rita.
"Now that I got kids, I've seen too much to say, 'Stay,'" Mr Naquin told Associated Press news agency.
In low-lying Plaquemines Parish, much of which lies outside the New Orleans levee system, a local official told Reuters news agency he was "really worried about the storm surge" - adding that a few more years were needed before flood protections were fully completed.
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Federal Emergency Management Agency Administrator Craig Fugate has warned that Isaac poses a threat to areas far beyond New Orleans.
"This is a Gulf Coast storm. Some of the heaviest impact may be in Alabama and Mississippi," he said earlier.
The governors of Louisiana, Florida, Mississippi and Alabama have all declared emergencies in their states, with the Republicans among them cancelling trips to the party conference.
Evacuations have been ordered for some low-lying Louisiana parishes and parts of coastal Alabama.
US offshore oil production is expected to be badly hit, as are refineries in lowland Louisiana.
As much as 78% of the Gulf's crude oil production and 48% of its natural gas production had been closed ahead of the storm, government figures showed.
BP and Chevron have shut down production, and BP is evacuating its platform.
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