NAGS HEAD (North Carolina), Aug 26: Some 65 million people along the densely populated US East Coast waited warily on Friday for a dangerous hurricane that could inflict billions in damages in an arc from Washington to Baltimore, Philadelphia, New York and Boston.

Rain carried by Hurricane Irene's outer bands was already reaching the southeastern part of North Carolina said National Weather Service meteorologist Rachel Zouzias. But the main thrust of the hurricane wasn't expected in North Carolina until sometime on Saturday.

Irene would be the strongest to strike the East Coast in seven years.

Irene remained a Category 2 storm with maximum sustained winds near 105 mph (169 kph). Little change in strength was expected by the time Irene reaches the North Carolina coast on Saturday, the National Hurricane Centre said.

Speaking from his vacation rental on Martha's Vineyard, Massachusetts, also in Irene's path, President Barack Obama urged Americans in the path of Hurricane Irene to heed instructions from state and local officials, especially if directed to evacuate.“I cannot stress this highly enough, if you are in the projected path of this hurricane you have to take precautions now,” the president said, adding that all indications point to Irene being a historic hurricane.

Irene destroyed hundreds of homes on small Bahamian islands but largely spared the capital of Nassau as it tore over the sprawling archipelago Thursday. There were no immediate reports of deaths, but some small settlements reported up to 90 percent of their homes damaged. Assessments from other islands were not in because telephone lines were down.

Larry McDonald, a wood carver, had thought to pack away his merchandise, but others in Nassau's Straw Market did not.

“How are we going to open? Ain't nobody going to come here to buy stuff. Might be for weeks, might be for months,” he said.

The US hurricane warning area was expanded to the coast from North Carolina north to Sandy Hook, New Jersey, which is just south of New York City. A hurricane watch extended even farther north and included Long Island, and the islands of Martha's Vineyard and Nantucket in Massachusetts.

North Carolina was just first in line along the Eastern Seaboard — home to some of the nation's most heavily populated areas and some of its priciest real estate. Besides major cities, sprawling suburban bedroom communities, ports, airports, highway networks, cropland and mile after mile of beachfront neighbourhoods are in harm's way.

“One of my greatest nightmares was having a major hurricane go up the whole Northeast coast,” Max Mayfield, the National Hurricane Centre's retired director, said. “This is going to be a real challenge ... There's going to be millions of people affected.”

The centre of the storm was still about 330 miles (531kms) south-southwest of Cape Hatteras, North Carolina, and moving to the north at 14 mph (22 kph).

Hundreds of thousands of New Yorkers were told on Thursday to pack a bag and be prepared to move. The nation's biggest city hasn't seen a hurricane in decades.

Risks are many from Irene's wrath: surging seas, drenching rains, flash floods and high winds are all possibilities the Federal Emergency Management Agency director wasn't counting out.

“We're going to have damages, we just don't know how bad,” Craig Fugate said as FEMA readied plans in many states. “This is one of the largest populations that will be impacted by one storm at one time.”

Latest forecasts had Irene crashing up the North Carolina coastline on Saturday, then churning up the East while drenching areas from Virginia to New York City before a much-weakened storm reaches New England.

Even if the winds aren't strong enough to damage buildings in a metropolis made of brick, concrete and steel, much of New York's subway system and other infrastructure is underground and subject to flooding. New York City's two main airports also are close to the water and could also be inundated, as could densely packed neighborhoods.

All told, Irene could cause billions of dollars in damages or more along the Eastern Seaboard in a worst case scenario, said Kathleen Tierney, director of the Natural Hazards Center at the University of Colorado.

In the last 200 years, New York has seen only a few significant hurricanes. In September of 1821, a hurricane raised tides by 13 feet in an hour and flooded all of Manhattan south of Canal Street, the southernmost tip of the city. The area now includes Wall Street and the World Trade Centre memorial.

New England is also unaccustomed to direct hits from hurricanes. Griffin, who fishes from Portland, Maine, still recalls the clobbering when Hurricane Gloria struck in 1985.

The first US injuries from Irene appeared to be in South Florida near West Palm Beach where eight people were washed off a jetty Thursday by a large wave.—AP