At least 190 people died when a ferry capsized off the popular tourist archipelago of Zanzibar, a minister said.
Zanzibar's state minister for emergencies Mohammed Aboud said the death toll from the disaster had risen to 190. His earlier estimate put the number of dead at 163.
Aboud said rescue workers have so far saved 610 people, but the rescue effort has been suspended because of nightfall.
The minister's updated figures indicate that more than 800 people were on board the stricken ferry, including families returning home after the holidays to celebrate the end of the Muslim holy month of Ramadan.
Officials said earlier that around 600 people were believed to be on board, but the exact number of passengers on this type of ferry is often difficult to establish as no reliable passenger lists are kept.
Some survivors have arrived back in Stone Town, the main port of the archipelago, with an emergency first aid centre set up in the port to treat those arriving by rescue speed boat from the capsized ferry.
"It was terrifying, people were screaming and shouting in the dark," said Aisha Mohammed, aged seven.
"I can't find my mummy, I lost her when we were all in the water," she added, after being picked up by a rescue boat.
Other survivors angrily accused port and ferry officials of overloading the boat.
"We were shouting at the captain and at the people in the port even before we left that the boat was too full - it was packed with people and with cargo," said Zaid Amour, a 50-year-old survivor.
"This was not an accident but is the fault of those who did not stop the boat from leaving when it was clear to passengers it was not safe."
The government pledged to do all it could to help.
"This is a national tragedy, so let us join hands together over this," Zanzibar's President Ali Mohamed Shein said, before announcing that the archipelago would observe three days of national mourning from Sunday.
"The government of Zanzibar will do everything that it can to support the victims of this terrible event," he added.
Zanzibar has a total population estimated at around 1.2 million.
Tanzania's President Jakaya Kikwete called the ship wreck "a big tragedy to Zanzibaris and all Tanzanians in general."
State emergencies minister Aboud told AFP Zanzibar has "asked for emergency assistance from Dar es Salaam, including divers, to help in the rescue efforts."
The MV Spice Islander, which was travelling between Unguja and Pemba - two of the three islands that make up Zanzibar, left Unguja around 9:00 pm (0600 NZT) and capsized four hours later.
"Sailors on the boat were still telling us 'it is ok' when we were calling for life jackets, so when things got really bad it was too late for many people," Amour added.
The ferry was reportedly carrying a heavy cargo of rice and other goods.
"Rescue operations are being hampered by a lack of equipment," deputy secretary of state for infrastructure and communication Issa Gavu told AFP.
Rescue diver Ali Shante who arrived at scene some five hours after the ferry capsized said many of those rescued were "found flotting using mattress, wood and bags of rice."
No foreigners have so far been reported amongst either the dead or rescued, according to an AFP reporter at the scene.
Ferries have a poor safety record in Tanzania. In May 2009, a ferry capsized leaving six people dead, while several fires on cargo boats have been reported in recent years.
Tourism is the main foreign currency earner for Zanzibar, famed for its white-sand beaches and historical buildings in Stone Town, listed as a world heritage site by UNESCO, the United Nations cultural organisation.
Pemba lies some 80 kilometres (50 miles) northeast of Unguja.