New York City Mayor Bill de Blasio, speaking at a press conference at the explosion site, said the blast appeared to have been caused by plumbing and gas work inside one building.
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Inspectors from utility Con Edison had been there to check on a planned gas meter installation about an hour before the fire, but determined the building was not ready for gas to be introduced, company President Craig Ivey said.
De Blasio noted that no one had reported a gas leak to authorities before Thursday's blast.
About 250 firefighters converged to fight the flames, which spread to nearby structures in an area of old tenement buildings. The fire department's commissioner said a second building was "in danger of possible collapse" and four buildings were affected in all.
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Firefighters said at least 12 people were hurt, three critically, some with burns to their airways as a result of the explosion, which happened on the corner of Second Avenue and 7th Street at 3:20 in the afternoon.
De Blasio said it didn't appear that anyone was missing.
"We are praying that no other individuals are injured and that there are no fatalities," the mayor was quoted as saying by the Associated Press.
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The area was evacuated, and the city's health department advised residents to keep their windows closed because of the smoke.
“Everything shook,” Sayed Dablu, a worker at Dallas BBQ located across the street from the collapsed building, told Sputnik. “The whole ground shook.”
As freelance photographer Michael Seto ran up to the buildings after hearing the explosion in his apartment a block and a half away, flames were spreading and engulfing one building's first floor.
Meanwhile, a man was climbing up the fire escape, not down, he said.
"People were calling to him that the building's on fire — he needs to get down," and he did, Seto said.
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Other witnesses said a woman scrambled down her fire escape in the moments after the explosion. She stopped on the second floor, afraid to go further, and passers-by climbed up to help get her down.
In the aftermath, one person was lying on the ground, being attended to by two to three passers-by who were holding his head still, Seto said. A woman was sitting on the curb with blood coming down her face, and another woman walked past him with blood on her face, he said.