Tropical storm Ernesto pummeled the Yucatan Peninsula Wednesday, downing trees and power lines as forecasters predicted it could pick up strength across Mexico's oil-rich Bay of Campeche.

The storm, which made landfall as a category one hurricane before being downgraded to a tropical storm, dumped heavy rain on the region, prompting fears of flash floods and mudslides.

The airport of Chetumal, a city of 151,000, reported minor damage. In Majahual, a small town with a growing tourism industry in Mexico's Quintana Roo state where Ernesto made landfall Tuesday, businesses suffered some damage.

Power outages were reported in the walled city of Campeche, a world heritage site on the west coast of the Yucatan Peninsula facing the Gulf of Mexico, and authorities warned its 300,000 residents to be prepared to batten down.

The Bay of Campeche is the center of Mexico's vital offshore oil fields.

"Pemex said that it was canceling some training exercises at oil rigs, but otherwise all operations in the region were normal," energy analyst Addison Armstrong of Tradition Energy said.

At 0300 GMT, the storm had moved out over the bay, and reports from an air force reserve reconnaissance aircraft indicated that the storm was once again gaining strength, the Miami-based US National Hurricane Center said.

The storm, located about 25 kilometers (15 miles) north of Mexico's Ciudad del Carmen, was packing maximum sustained winds of 100 kilometers per hour, and was heading west at a speed of 11 kilometers per hour.

The storm -- which was the second hurricane of the Atlantic season -- was again expected to weaken as it struck Mexico's Gulf coast, but a hurricane warning remained in effect for certain areas near the port of Veracruz.

The Yucatan Peninsula is home to bustling holiday destinations such as the resort city of Cancun and the island of Cozumel. Mexico's tourism ministry said vacation hotspots and airports were operating normally.

The storm, which began drenching Caribbean countries last week, also dumped heavy rains on areas of Belize, Guatemala and Honduras. Areas of Mexico's Tabasco, Veracruz and Puebla states could see up to 12 inches of rain.

"These rainfall amounts may produce life threatening flash floods and mudslides over higher terrain," the NHC added.

Ernesto is the fifth named storm in the Atlantic Ocean since the hurricane season began on June 1.

Chris, which strengthened to hurricane force on June 21, stayed far off land, and fizzled out without causing any damage.

In the Pacific, Gilma strengthened into a hurricane late Wednesday -- a category one storm on the five-point Saffir-Simpson scale.

At 0300 GMT, it was located about 1,170 kilometers (725 miles) southwest of the southern tip of Baja California, and was not expected to pose a threat to land.