The 6.2 magnitude earthquake rattled the region overnight, reducing buildings to rubble and leaving most residents terrified and panicked.
The epicentre of the quake was in Norcia in Umbria, about 105 miles north-east of Rome, while the hardest-hit towns reportedly were Amatrice, Accumoli and Pescara del Tronto.
Much of the town of Amatrice was reduced to rubble and a family of four were feared dead in nearby Accumoli.
Two boys aged four and seven were pulled out alive from the debris of the house they had been staying in with their grandmother.
According to La Repubblica, a witness named Marco, a sanitation worker from Amatrice, saw how everything "fell apart" in an instant.
"It was a miracle for me to survive... I just woke up when suddenly everything collapsed. Ten seconds were enough to destroy everything," he said.
A witness in Configno, near Amatrice, recalled: "It was a nightmare. We woke up at 3.35 a.m. (local time), the furniture falling down, walls moving more than a meter. We rushed out, many are still in their underpants here, in the street. We did some bonfires in the square and went to help old people to get out from their houses."
Amatrice is known for its traditional all'amatriciana pasta sauce, and was gearing up to hold a festival celebrating the recipe this weekend, CNN reported.
In Accumoli, a local photographer spoke of 15 rescuers digging with their bare hands trying reach the family.
"They can hear the screams of the mum and one of the children," the photographer said.
Rescuers in Accumoli were also trying to dig out a 58-year-old man who was trapped in his home and several more were missing.
The town is popular with holidaymakers and most of the 2,500 people left displaced by the earthquake were said to be visitors.
"The roads in and out of town are cut off. Half the town is gone. There are people under the rubble. There's been a landslide and a bridge might collapse," said Mayor Sergio Pirozzi.
"There are tens of victims, so many under the rubble. We are preparing a place for the bodies," he said.
According to the Mirror, devastated residents were seen in tears among the wreckage as they took in what was left of their homes.
Lina Mercantini of Ceselli, Umbria added: "It was so strong. It seemed the bed was walking across the room by itself with us on it."
The earthquake struck at a shallow depth of 10 km, its intensity was compared to the April 2009 Aquila earthquake in which at least 309 persons died. The epicentre was around Accumoli where several persons died, BBC reported.
Officials were unsure of the full extent of casualties, but at least 11 persons were reported dead including children in the neighbouring villages of Pescara del Tronto and Arquata del Tronto. An elderly couple and a boy were among the victims.
The Italian branch of the Red Cross sent at least 20 ambulances and sniffer dogs to affected areas alongside the Italian Defence Ministry.
