More than 345 people are feared dead when a passenger and cargo ship with over 600 aboard capsized overnight between two islands in Zanzibar, the semi-autonomous republic of Tanzania, a local official said Saturday.

The ship was travelling Friday night from Zanzibar to Pemba, the sister island 40 km away, when it capsized at Nungwi area, making it the worst of its kind in the history of Zanzibar.

According to Zanzibar Deputy Minister of Communication and Infrastructure Issa Haji Ussi, 250 people have been so far rescued out of the over 600 people onboard.

Rescue is underway with the help of some fishing boats in that area while the bodies retrieved are being brought to Zanzibar National Ground where relatives of the victims went to identify them.

Reports said the cause of the accident is due to overload of passengers and cargo, but other reports said technical fault cannot be ruled out at this stage.

Zanzibar government has termed the accident, the worst of its kind, as disaster for the whole nation.

Maritime accidents are not uncommon in this area due to billowy waves and overloading. Commuters between the two islands complained that the ferries are always in poor condition and overloaded.

A previous report said the government in Zanzibar had promised to invest in bigger vessels to ferry passengers between the two island.

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