As evening brought freezing temperatures to northwestern China's Gansu province, shellshocked residents huddled around small fires in the street, reeling after the country's deadliest earthquake in years deprived them of shelter.

The quake, which struck in the dead of Monday night, has killed at least 127 people -- mostly in impoverished Gansu -- and injured hundreds of others.

Near the epicentre in Dahejia, a remote town around 2,000 metres (6,500 feet) above sea level, a middle-aged Muslim woman wearing a black headcovering told AFP it was the first time she had experienced such a powerful earthquake.

"Usually there are no quakes here. Even the elderly said they had never seen anything like this before," she said.

She had been shaken awake when the earth began moving, and grabbing her two children, immediately fled into the icy night.

The shop she owned had been badly damaged, so she was now selling her wares on the street.

"It's too dangerous to stay inside," she said, declining to give her name.

Multiple buildings in Dahejia had completely caved inwards, and the top of the mosque in the predominantly Muslim town had collapsed askew.

"I am 70 and I have never experienced such a powerful quake in my life," resident Ma Wenchang told AFP as he pointed to the deep cracks carved through his home's walls.

"I can't live (in this house) anymore because it's too dangerous. My relatives have been relocated somewhere else."

Ma too had been sleeping when the earthquake struck.

"When I realised (what had happened) I ran out to my courtyard -- and it was still shaking," he said.

A group of locals sat around a wood-scrap fire next to a line of emergency vehicles, as the sun sank behind the stark terracotta outcrops that are typical of the region.

In the town square, volunteers were rushing to set up tents for rescuers.

Thousands of emergency workers were dispatched on Tuesday to search through rubble and help survivors.

"The most urgent task for us is to make things ready quickly as temperatures will reach -17 C (1.4 degrees Fahrenheit) tonight," a volunteer told AFP.

They were setting up the base "so rescuers can focus on helping people -- (many have) no water, no electricity", she said.

Away from the square, power in the town seemed to be cut off, and the streets were dark.