Dozens of people are believed trapped in ruined Amatrice, Accumoli and Pescara del Tronto, in mountainous central Italy.
There have been hundreds of aftershocks since the quake struck, hampering relief efforts and damaging already unstable buildings.
More than 4,300 rescuers are using heavy machinery and their bare hands.
Rescuers have advised journalists and bystanders to leave Amatrice urgently, as “the town is crumbling”, the BBC’s Jenny Hill says.
Another powerful aftershock struck the town on Thursday afternoon, sending a huge dust cloud into the air.
Many of the earthquake’s victims were children, the health minister said, and there were warnings the toll could rise further.
The heaviest death toll was in Amatrice – 184, officials said. Another 46 died in Arquata, and 11 in Accumoli. A further 264 people have been treated in hospital.
Officials revised the number of dead after earlier giving a figure of 247.
The 6.2-magnitude quake hit at 03:36 (01:36 GMT) on Wednesday 100km (65 miles) north-east of Rome.
“We are sleeping in the car and there were shocks all night. When the biggest one came, the car started moving and shaking,” said Monica, a survivor from Amatrice.
Two firemen burrowed deep into the rubble looking for a survivor. “It’s a dog,” one of them shouted out.
For half an hour the men kept digging. They passed water down to be given to the animal. And eventually they worked it free, then emerged, carrying it to the surface. There was a ripple of congratulations through the crowd.
“It doesn’t matter to us if it’s a person or an animal, we save it,” said Gianni Macerata, the fire officer in charge.