VIAREGGIO, ITALY - Axle failure on a wagon carrying liquid gas caused this week's rail disaster in northern Italy, the country's transport minister said Wednesday, as the death toll climbed to 17.

Two children injured in the explosion when a train ferrying liquid petroleum gas derailed in the town of Viareggio died Wednesday, bringing the death toll to at least 17, hospital sources told AFP.

A three-year-old Moroccan boy and another boy, two and half years old, had suffered burns on more than 90 percent of their bodies in the giant fireball created by the explosion late Monday in the seaside resort northwest of Pisa.

Another 25 people were badly injured, some of them in critical condition, a rescue services official, Andrea Nicolini, told Sky TG24 television.

Up to three people were reported missing, but most of the burnt bodies were unrecognisable and forensic pathologists were working to identify them and carry out autopsies.

It was the worst railway accident since January 2005 when a passenger train collided with a cargo train near Bologna which also claimed 17 lives.

The force of the blast brought down two small blocks of flats, where many of the victims lived. Others were simply passers-by caught up in the explosion.

Transport Minister Altero Matteoli told parliament a small crack and traces of rust had been found in the axle of the wagon that derailed, bringing other wagons off the track as it passed through the centre of the town.

As the Italian press criticised the apparent lack of security measures, Matteoli said he had been in contact with the European Union's Transport Commissioner, Antonio Tajani.

They had discussed tightening the regulations on the transport of dangerous materials, he said. Newspaper reports noted two other recent incidents of broken train axles which had been without consequence, while La Repubblica complained that maintenance and checks were only self-regulated.

'Disasters due to the failure of obsolete equipment are said to happen in the Third World ' but now there is Viareggio,' it said.

Prosecutor Beniamino Deldda said, 'This accident is not the result of chance but of omissions which will be carefully examined.'

Fire crews worked overnight to clear the remaining train wagons of their volatile cargo. By Wednesday morning six of the 13 remaining wagons of gas had been safely unloaded, fire services said, and the operation was expected to be completed by the end of the day.

Some 300 local residents were kept away from their homes as a safety precaution, local officials said.