Mayor Bloomberg: "Today is a further reminder of the danger we face"
New York City police have defused an improvised car bomb parked in Times Square, one of the city's busiest tourist areas.
They say propane tanks, fireworks, petrol and a clock device were removed from a parked sports utility vehicle.
So far, there is no evidence that it was more than a "one-off event", the US homeland security chief said.
Forensic evidence including fingerprints had been recovered, Janet Napolitano told NBC television.
"We're treating it as if it could be a potential terrorist attack," she said.
Early on Sunday the vehicle was towed to a forensic lab in the city's Queens district and Times Square was reopened.
Part of the district - where many theatres are sited - had been sealed off on Saturday night after the bomb alert.
Both US President Barack Obama and New York City Mayor Michael Bloomberg praised the quick response by the New York Police Department.
AT THE SCENE
By Ian Sherwood in New York
Thousands of tourists were evacuated from the area after a T-shirt vendor alerted the police when he spotted smoke coming from a Nissan Pathfinder.
Heavily armed police and emergency vehicles then shut down many of the busiest streets in Manhattan, which were filled with theatregoers in the heart of Broadway.
Many who had gathered on 43rd Street and Broadway were shocked to hear that the iconic Times Square had been sealed off due to a suspected car bomb.
Theatregoers reported that police officers had come onto the stage during and after some of the Broadway shows to ask the audience if they had any information about the vehicle.
"We are very lucky," Mr Bloomberg told reporters. "Thanks to alert New Yorkers and professional police officers, we avoided what could have been a very deadly event."
He said the bomb "looked amateurish" but could have exploded, adding that the incident was a "reminder of the dangers that we face".
Correspondents say the New York City Police Department is on constant alert after a series of alleged terror plots in the wake of the 9/11 attacks.
"The NYPD bomb squad has rendered safe an improvised car bomb," said New York Police Commissioner Ray Kelly.
"I think the intent was to cause a significant ball of fire," he added.
The alert was triggered when a street vendor saw smoke coming from a Nissan Pathfinder parked on 45th Street and Seventh Avenue at about 1830 (2230 GMT) on Saturday.
The vehicle had its engine running and hazard lights flashing, officials said.
Police shut down several blocks of Times Square, as well as subway lines, while a robotic arm broke windows of the vehicle.
"There were explosive elements, including powder, gasoline, propane and some kind of electrical wires attached to a clock," police spokesman Paul Browne told reporters early on Sunday.
"No motive has been identified," he added. A metal box resembling a gun locker was also recovered, police say.
Show goes on
Security footage is being reviewed after reports that a person had been seen running away from the vehicle.
Police have established that the car's registration plates do not match up with the Nissan. They belonged to a car owner in the state of Connecticut, who told officers he had sent the plates to a junkyard.
There is talk about moving us to another hotel but I am not sure how this is going to happen
Jerry Brown, one of the tourists evacuated from the nearby Marriott Marquis hotel, told the BBC: "Guests are sitting on the street and there is considerable chaos... There is talk about moving us to another hotel but I am not sure how this is going to happen."
FBI agents joined NYPD investigators at the scene.
The White House said President Obama was being kept up to date on the investigation.
On everyone's mind is the city's darkest day, the 2001 attack on the Twin Towers just a few miles away, says the BBC's Barbara Plett in New York.
The most recent terror alert in New York City involved a plot to set off suicide bombs in the subway system.
Earlier this year an Afghan immigrant, Najibullah Zazi, and an associate, Zarein Ahmedzay, both pleaded guilty in connection with the attempt.
Last year four New Yorkers went on trial accused of plotting to bomb synagogues in the city and fire missiles at military aircraft.
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