Hurricane Irene lashed North Carolina with driving wind and rain on Saturday as it neared land on a path threatening the densely populated US east coast with flooding and power outages.

New York City ordered unprecedented evacuations and transit shutdowns as states from the Carolinas through to Maine declared emergencies due to Irene, whose nearly 960 km width guaranteed a stormy weekend for tens of millions of people.

With winds of 90 miles per hour, Irene weakened slightly to a Category 1 hurricane on the five-step Saffir-Simpson scale by early on Saturday but it remained a dangerous storm.

'Tonight's the hard night. We're just waiting for it to hit,' North Carolina Governor Bev Perdue told CNN.

At 3 am EDT (0700 GMT), the center of Irene was about 60 miles south of Cape Lookout, North Carolina, the US National Hurricane Center said.

'Irene is expected to remain near the threshold of Category One and Category Two strength,' the center said. 'Some weakening is expected after Irene reaches the coast of North Carolina but Irene is forecast to remain a hurricane as it moves along the mid-Atlantic coast on Sunday.'

Hundreds of thousands of residents and vacationers had evacuated from Irene's path. Supermarkets and hardware stores were inundated with people stocking up on food, water, flashlights, batteries, generators and other supplies.

'Our number of customers has tripled in the last day or two as people actually said 'Wow, this thing is going to happen',' said Jack Gurnon, owner of a hardware store in Boston's affluent Beacon Hill neighborhood.

Airlines canceled nearly 7,000 flights over the weekend and all three major New York area airports were due to close to incoming flights at noon (1600 GMT) on Saturday.

President Barack Obama said the unusually large storm could be 'extremely dangerous and costly' for a nation that still recalls the destruction in 2005 from Hurricane Katrina, which swamped New Orleans, killed up to 1,800 people and caused $80 billion in damage.

Irene, the first hurricane of the 2011 Atlantic season, caused as much as $1.1 billion in insured losses in the Caribbean this week, catastrophe modeling company AIR Worldwide said, with more losses expected to come.

Soldiers ready

Defence Secretary Leon Panetta said the US military stood ready to help in the response to Irene, with more than 100,000 National Guard forces available if needed in eastern states.

A quarter of a million New Yorkers were ordered to leave homes in low-lying areas, including the financial district surrounding Wall Street in Manhattan, as authorities prepared for flooding on Sunday.

A mandatory evacuation was ordered for residents in large areas of nearby Long Island, which juts into the Atlantic.

New York's mass transit system, which carries 8.5 million people on weekdays, was due to start shutting down around midday on Saturday.

'We've never done a mandatory evacuation before and we wouldn't be doing it now if we didn't think this storm had the potential to be very serious,' Mayor Michael Bloomberg said.

Irene will be the first hurricane to hit the US mainland since Ike pounded Texas in 2008.

In Washington, Irene forced the postponement of Sunday's dedication ceremony for the new memorial honoring civil rights leader Martin Luther King Jr. Tens of thousands of people, including Obama, had been expected to attend.

Flooding from Irene killed at least one person in Puerto Rico and two in Dominican Republic. The storm knocked out power in the Bahamian capital, Nassau, and blocked roads with trees.-Reuters