The town of Pilger, just several blocks wide and home to about 350 people, took a direct hit on Monday afternoon as tornadoes swept across a farming area in northeast Nebraska, devastating up to 75 percent of its buildings, officials said.
Nebraska Governor Dave Heineman has toured the storm damage and declared a state of emergency.
A five-year-old girl died in a mobile home and a second person died in a traffic crash east of town, Stanton County Sheriff Mike Unger told reporters.
More than two dozen people were treated for storm injuries at hospitals, officials said.
Pilger, about 160 km northwest of Omaha, was the hardest hit town in a three-county area. Unger said the list of damaged buildings included the city hall, the fire department, post office, library and school.
He said 40 to 50 homes were destroyed or damaged beyond repair when the tornado cut northeast through Pilger.
"My first impression is it looks like the Middle East," Nebraska Congressman Jeff Fortenberry told a news conference.
An area about six blocks long and six blocks wide was wiped out, with debris clogging roads. Crushed vehicles littered the area.
The National Weather Service's Storm Prediction Center in Norman, Oklahoma, reported at least one and possibly two cases in which a pair of large twisters touched down simultaneously, a rare phenomenon according to meteorologists.
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