At least 27 die as tiny people-smuggling boat runs aground in monstrous seas

Locals on Christmas Island watched in horror from a cliff as the boat, carrying about 70 people, broke apart with a crack, dumping screaming men, women and children into monstrous waves that pounded them against the rocks.

"It was just horrible. People getting crushed. Bodies, dead children, the whole thing was pretty awful," islander Simon Prince said.

Officials said 27 bodies, including those of women and children, had been recovered from the water. Forty-one survivors were pulled from the sea, and one person made it to shore.

"The rescue is being conducted in extremely difficult and dangerous conditions," a spokesman said. "The search and rescue situation is ongoing."

Acting Prime Minister Wayne Swan said the vessel was a people smuggler's boat, but it was not clear where the passengers were from. Christmas Island is a remote Australian territory closer to Indonesia than the mainland and a frequent target of refugee hopefuls, who are housed in a detention centre there.

Mr Prince, who lives next to the cliff where the boat crashed, said he was woken by what he thought were cheers.

He walked to the cliff and instead heard cries for help from the boat just offshore.

"The engine had failed. They were washing backward and forward very close to the cliffs here, which are jagged limestone cliffs, very nasty."

He called the police and soon there were dozens of locals standing on the cliff, agonising over how they could reach the stricken passengers. He said the boat was tossed around for an hour before it finally hit the rocks.

"When the boat hit the cliff there was a sickening crack. All the people on board rushed to the land side, which is the worst thing they could do, but I don't think anybody could swim. I think there were about two lifeboats on board this thing," Mr Prince said.