U.S. President Barack Obama has declared an emergency for North Carolina as Hurricane Irene bears down on the U.S. and Canadian east coast, after flattening hundreds of homes across the Caribbean.

The furious storm is expected to make landfall along the Carolinas this weekend.

Irene is now a major Category 3 storm and, by 8 p.m. Thursday, about 530 miles (855 kilometers) south-southwest of Cape Hatteras in North Carolina, churning the waters of the Atlantic with sustained winds of 155 mph (185 km/h) according to the National Hurricane Center (NHC) in Miami.

There are forecasts that Irene could reach Category 4 with winds upwards of 210 km/h. The storm may gain strength Thursday night and on Friday, said the NHC.

Irene is expected to follow the coast to New York City, New England and into Quebec and the Maritimes.

The former chief of the NHC called it one of his three worst possible situations.

"One of my greatest nightmares was having a major hurricane go up the whole northeast coast," Max Mayfield, the centre's retired director, told The Associated Press.

He said the storm, comparable in size to Hurricane Katrina, which ravaged New Orleans in 2005, damage will probably climb into billions of dollars: "This is going to have an impact on the United States economy."

A map of the hurricane's expected path posted by the Canadian Hurricane Center (CHC) indicates winds of 95 km/h on Monday as the storm cuts across eastern Quebec and the Maritimes, though the center said Thursday it is too early to make predictions about Irene's intensity when it makes landfall, or potential damage.

"At this point in time we encourage consulting the bulletins at least twice a day for updates on our forecast and discussions," the centre said.

The CHC added that typically, with a hurricane of this nature, the heaviest rainfall will occur to the left of the storm track, in this case Labrador and Quebec, while the highest winds occur to the right, over the other eastern provinces.

Some 60 million people live in Irene's expected path.

New York State, among others, has declared a state of emergency while New York City Mayor Michael Bloomberg urged residents in low-lying areas to head for high ground ahead of possible evacuations.

U.S. president Barack Obama and his family are currently vacationing in Martha's Vineyard off the coast of Massachusetts, which is also on Irene's path. They are scheduled to leave on Saturday ahead of the hurricane's arrival.

Irene wrecked havoc in the Bahamas on Thursday. There were no immediate reports of deaths but some small settlements reported up to 90 per cent of their homes damaged.

Jeffrey Todd, a Canadian working as an editor for the Nassau Guardian in the Bahamas, said he is hunkered down in the paper's newsroom where he can hear the "intense" roar of the storm through the walls.

"It's interesting to experience," Todd told CTV News Channel on Thursday. "It's a bit of a cliché that people say you shouldn't underestimate a hurricane, but it's true."

He said the wind and rain is different from any weather he's ever been in before.

"The rain is very harsh and it hurts the skin," he said. "You panic very quickly because there's a tremendous sense of uncertainty."

In Virginia, the U.S. Navy ordered its Second Fleet to leave Norfolk Naval Station in order to find safer locales for the ships to ride out the storm. Nine ships were already at sea as of Thursday morning, 27 were on their way and another 28 were being moved to shipyards and other safe harbours.

With files from Associated Press