Italian Civil Protection officials say the ground remains unstable and further collapse is possible.
Rubble from homes already destroyed lies at the bottom of the cliff, and authorities warn another section of land could give way, putting more buildings at risk.
Drones and satellite images are being used to monitor the red zone and track the speed of the landslide.
Police patrol nearly empty streets as emergency crews remain on standby.
Niscemi, a town of about 25,000 people built on fragile sandstone and clay, suffered a similar landslide nearly 30 years ago.
Experts warn such disasters may become more frequent as climate change brings increasingly extreme weather.