The explosion yesterday occurred in one building at Second Avenue and Seventh Street, leveling the structure and partly destroying another.
New York City Mayor Bill de Blasio said while a probe was underway, preliminary evidence suggested it was a gas-related explosion.
"The initial impact appears to have been caused by plumping and gas work that was occurring inside one of the buildings," the mayor said, adding that fire department personnel have been "battling heavy fire conditions" in the "complex and difficult operation".
Images of the scene showed smoke engulfing the area with residents of the building making desperate attempts to escape the fire and flee to safety.
"Our thoughts and our prayers are with every one of them and their families. And of course, we are praying that no other individuals are found injured, and that there are no fatalities," de Blasio said.
A CNBC report said that the ground floor of the building where the explosion occurred housed a sushi restaurant.
Shameem Noor, a cashier at a restaurant nearby, said he heard a "big sound" and people fall on the street.
"People were running and screaming... There's a big fire on the roof and black smoke," he said.
Jessie Ballan owner of Cafe Mocha, a nearby business, told CNBC the police had ordered him to close his business due to too much smoke.
Mark Sydorak, a 70-year-old accountant who works nearby, said he rushed outside when he heard a loud explosion.
About 250 firefighters were on the scene, searching for anyone who may still be in those buildings and ensuring that the fire does not spread of to the surrounding buildings.
Another building is in danger of possible collapse and authorities have cleared the area, Nigro said.
Authorities have set up a temporary shelter and relocation center in a neighboring school. The buildings were privately-owned with one of them housing a private company.
The incident comes a year after a huge explosion caused by a gas leak destroyed two buildings in Harlem neighbourhood, killing two people and injuring 18 others.
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