WELLINGTON, New Zealand - Some 10,000 houses in Christchurch will have to be demolished because of damage from last month's earthquake and parts of the city will have to be abandoned altogether, the country's leader said on Monday.

The magnitude 6.3 temblor hit within 5 km of Christchurch and close to the surface on Feb 22. It shattered homes, heritage buildings and office blocks, and caused 166 confirmed deaths. Officials say the toll is expected to rise to more than 200 as rescuers continue to search for bodies trapped in the rubble.

Earthquakes can cause sections of earth to liquefy and push up to the surface as watery silt, a process called liquefaction. In Christchurch, 260,000 tons of silt have already been scraped away.

"There are some parts of Christchurch that can't be rebuilt on," Prime Minister John Key told reporters. "The liquefaction damage from the ... earthquake is so great and the land damage ... is so significant we can't remediate it."

Key said some 10,000 houses will have to be demolished in the city, including 3,300 that were damaged by an earlier magnitude 7.1 quake on Sept 4. That quake was deeper and further away than the Feb 22 event, and did not cause any deaths or as much damage.

As well, several hundred central city commercial buildings will have to be bulldozed, Key said.

"Potentially there are some ... areas of Christchurch which will need to be abandoned, and we will have to provide other alternatives for people to live in because the land has been so badly damaged, we can't fix it - certainly not in a reasonable time frame," he said.

He said modular houses will be brought in to provide temporary housing for some of the many thousands of displaced homeowners, some of whom will have to abandon their wrecked homes and land.

A national memorial service is planned for March 18, and Key said the open-air service in a city park could attract up to 100,000 people.

Work crews are still clearing rubble from the earthquake, which badly hit the downtown area as well as cutting water and power services across the city. Almost all electricity supplies have been restored, but residents in the city are being told to boil tap water because of the risk of contamination.

Officials say some 70,000 people - one-fifth of Christchurch's population of 350,000 - have left the city temporarily as a result of the quake.

Associated Press