The incident occurred at 116th Street and Park Avenue on Wednesday morning. East Harlem residents reported hearing a blast in the five-storey apartment building before it caved in, according to US media.
All train services in and out of Grand Central terminal have been halted following the incident near its tracks. The New York fire department has elevated the incident to the highest threat level possible.
It announced it has dispatched 168 members from more than three dozen nearby fire stations to battle the blaze.
Local media have 11 people suffered minor injuries, while a nearby hospital said it had received one patient with heavy trauma. The local utility has been called to shut off the gas following the explosion, which damaged windows in the area, reports WABC TV.
“It was an explosion and a building collapsed,” a spokesman for New York Police Department told AFP news agency.
A witness told the New York Daily News she had smelled gas “for weeks” before the explosion.
“We saw people flying out of the window… those are my neighbours,” Ashley Rivera said.
Another witness working near the site told the newspaper he heard two loud explosions that shook his shop.
“It was loud, like boom, boom!” Mitch Abreu said. “It rocked the whole block. “A window blew out of the other shop down the street,” he added.
“It looked like the [Twin] towers all over again. People covered in dust and covering their mouths.” [BBC]