MAPUTO (Reuters) -Tens of thousands of people are feared to have been displaced following a deadly attack by Islamic State-linked insurgents on a gas hub town in northern Mozambique, aid agencies said, as rescuers searched for survivors on Tuesday. Many of those fleeing were believed to have scattered into dense forest or to have attempted to escape by boat when Palma came under attack on Wednesday, aid workers told Reuters. Some waded out to sea to hide, one survivor said. Mozambique’s government has confirmed dozens of deaths, including at least seven killed when militants ambushed a convoy of vehicles trying to escape a besieged hotel on Friday. Witnesses have described bodies in the streets, some of them beheaded. The U.N. Office for the Coordination of Humanitarian Affairs (OCHA) said it continued to receive reports of clashes in Palma and nearby areas on Tuesday. “It’s a real humanitarian catastrophe,” Lola Castro, World Food Programme regional director, told Reuters. “People are ... scattered all over the place - by boat, by road.” Reuters has not been able to independently verify the accounts from Palma, a logistics hub for adjacent gas projects worth around $60 billion led by oil majors including Total. Most communications to the town were cut on Wednesday. Phone calls to Mozambique’s government and security officials went unanswered on Tuesday. Islamic State claimed the attack on Monday via its Amaq news agency. A U.S. official said it may show the group’s increasing “brazenness” in Mozambique, where militants are now seeking to hold towns. Portugal will send 60 soldiers to help train armed forces in Cabo Delgado next month, state news agency Lusa reported on Tuesday. However, a defence ministry spokeswoman told Reuters a bilateral agreement on the training mission was still being finalised. LOOKING FOR SAFETY The district where Palma is located is home to around 110,000 people, according to U.N. estimates. They include about 43,600 who sought shelter there after fleeing attacks elsewhere in Cabo Delgado province, which has been home to a simmering Islamist insurgency since 2017. “(Many) came to Palma looking for safety, and they have left Palma without any,” said Jonathan Whittall, director of analysis at international aid group Medecins Sans Frontieres. Slideshow ( 2 images ) Some would likely be trying to make their way south to the provincial capital, Pemba, by boat, aid workers said, while others were headed north through the bush toward the Tanzania boarder. As of Tuesday morning, more than 3,360 displaced people had been registered in Pemba and districts surrounding Palma, the International Organization for Migration said. However, many more were still believed stranded, the U.N. and aid agencies. A group arriving in Pemba told the U.N. refugee agency that their initial attempts to seek safety in Tanzania were thwarted by a difficult river crossing. WFP had flown doctors into the Palma area and ferried hundreds of people to safety, including aid workers, Castro said. However, three humanitarian workers remained unaccounted for. A private security firm contracted by the government and companies with personnel in the town were also searching for survivors. Lionel Dyck, who runs Dyck Advisory Group, a South African firm that works with Mozambique’s government, said his helicopters had come under heavy fire from insurgents wielding AK-47s, machine guns and mortars as they plucked people from the bush. He said most were being flown to a camp outside Palma used by the gas developments. A ferry carrying around 1,000 people, including some injured, was expected to leave the project site for Pemba on Tuesday, a diplomat and another person familiar with the operation told Reuters.