A man is in custody and several people are injured after a suspected terrorist detonated a home-made pipe bomb at one of New York’s busiest bus terminals.

The explosion that rocked the Port Authority Bus Terminal during the morning rush hour was “an attempted terrorist attack”, New York Mayor Bill de Blasio said Monday morning (AEST).

It is believed Akayed Ullah, 27, who was arrested at the scene, had a pipe bomb strapped to his body which exploded in an underground passageway.

“Thank God he did not achieve his ultimate goals,” Mr de Blasio said.

“There are also no credible and specific threats against New York City at this time,” he added.

The fire department tweeted there were four injuries, all non-life threatening. One of the injured was a Port Authority police officer.

CCTV footage posted on Twitter showed the moment of the explosion as commuters made their way along the busy underpass.

SEE IT: The moment the bomb went off underground near the #PortAuthority. Read more about the suspect: https://t.co/rJSzrRTrY4 pic.twitter.com/aksYcSdmzh

— CBS New York (@CBSNewYork) December 11, 2017

New York City Fire Department Commissioner Daniel Nigro said Ullah was being treated at Bellevue Hospital for lacerations and burns to his hands and abdomen.

Mr Nigro said three other people near the detonation suffered minor injuries.

New York Police deputy commissioner of intelligence and counterterrorism John Miller said the pipe bomb was attached to Ullah with Velcro and zip ties.

An NYPD source was quoted by CNN as saying it was possible the explosive device either malfunctioned or did not go off the way it was supposed to.

Police commissioner James O’Neill, who described the bombing as a “terror-related incident”, police were working to determine if the hallway was actually where Ullah intended to detonate the device.

Mayor de Blasio later said there were no known other incidents and the suspect is believed to have acted alone.

New York Governor Andrew Cuomo said Ullah may have made the device from online instructions, and the bombing did not appear to be part of a larger plot.

He reportedly constructed the bomb in his Brooklyn apartment.

Law enforcement officials were quoted by the Associated Press as saying Ullah was inspired by ISIS but had apparently not had any direct contact with the group and probably acted alone.

They said he told investigators in hospital that he was inspired by the Islamic State group to carry out an attack, but had no direct contact with the terror group.

Ullah entered to the US from Bangladesh on an F-4 visa for people with family already citizens in the US, according to the AP.

White House spokeswoman Sarah Huckabee Sanders said the explosion highlighted a need for “immigration reform”.

Ms Sanders said that Congress should work with the President, stressing the need to “protect our borders” and calling for a “merit-based” immigration system.

The Port Authority bus terminal was temporarily shut down after the explosion and hundreds of people were evacuated, while a large swathe of midtown Manhattan was closed to traffic.

Subway trains were bypassing the Times Square station, the city’s busiest.

“There was a stampede up the stairs to get out,” said Diego Fernandez, one of the commuters at Port Authority. “Everybody was scared and running and shouting.”

Bangladeshi-born Ullah was arrested and taken to hospital. Photo: NY Taxi Authority

President Donald Trump was briefed on the incident.

WABC reported the suspect was from Bangladesh, and that he has been in the US for seven years and has an address in New York’s Brooklyn.

First reports of the incident began soon after 7am local time, at the start of the city’s rush hour.

New York in December sees a surge of visitors who come to see elaborate store displays, the Rockefeller Center Christmas tree and Broadway shows.

The bombing follows an attack in October in which eight people were killed when Uzbek-born Sayfullo Saipov allegedly drove a rented van down a busy bicycle path near New York’s World Trade Center memorial.

Witnesses reported the man shouted, “Allahu Akbar” (God is greatest) before being arrested at the scene.

Prosecutors said Saipov left a note in his vehicle proclaiming that the “Islamic State would endure forever”.

– With AAP