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The underwater quake, which measured 6.9 magnitude, shook buildings in the capital and was felt as far away as northern Greece, Jordan and Egypt.
It struck at 1134 GMT and lasted for several seconds.
The quake's epicentre was located about 200km (125 miles) south of Athens, near the island of Kythira, the Athens Geodynamic Institute said.
A ferry boat captain sailing close to Kythira said the movement of the sea was tremendous.
This is the most seismic part of the Mediterranean basin and Greeks are used to buildings swaying, but this this quake was so powerful, it sent thousands of people running into the streets, reports the BBC's Malcolm Brabant in Athens.
In Crete, an elderly couple had a narrow escape. Seconds after they abandoned their home, a boulder crashed down from a mountain and flattened it.
On the island of Kythira, there are reports that a village church and several buildings have collapsed.
The island of Karpathos to the south has also suffered some damage.
George Karakasais, a seismologist at Aristotle University in Salonica, said this quake was the main event and not a precursor to a more powerful tremor.
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