MIAMI (AFP) - Hurricane Nicole closed in on Bermuda as an "extremely dangerous" storm, US weather forecasters said on Thursday (Oct 13), just hours before it was due to hit the tiny British territory.

At its peak overnight, Nicole was a Category Four, one shy of the top intensity level on the Saffir-Simpson scale, before being downgraded a notch.

"We are now experiencing sustained 50 knot winds with hurricane force gusts and are yet to get into the eye wall proper," minister for national security Jeffrey Baron told Agence France-Presse.

"Bermuda has a very long history of navigating through serious storms and hurricanes. We are a very resilient population and when we are faced with a serious storm, Bermudians band together in the face of adversity. We are very proud of that," he said. "The public have heeded the weather warnings and advisories, they have been helping and supporting each other and I have been extremely encouraged by their level of awareness and preparedness for Hurricane Nicole."

The Miami-based National Hurricane Centre said Nicole currently is churning in the Atlantic with maximum sustained winds of 205 kilometres per hour.

At 8pm Singapore time, Nicole was about 85 kilometres south-west of Bermuda, barreling toward the north-east at around 24 kilometres per hour.

The hurricane was expected to pass over or near the archipelago by late morning (local time), according to forecasters, who said Bermuda already had been buffeted overnight by tropical storm conditions.

"Although a gradual weakening is forecast, Nicole is expected to be at major hurricane strength when it moves near Bermuda later today," the NHC said.

Authorities in Bermuda closed schools and government offices on Wednesday (Oct 12).

Buildings were boarded up as heavy wind and rain hit the islands, and airlines have canceled flights to the islands.

"I believe we are generally ready for it," local media reported Premier Michael Dunkley as saying. "Now we just have to hope and pray for the best."

The tiny archipelago, just 54 square kilometres in size, was dwarfed by the massive system, whose eye - set to pass near the island later on Thursday - was bigger than the entire country, according to meteorologists.

Rain and powerful gusts began hitting early on Thursday, though many noted that the island's famous tree frogs, tiny amphibians whose high-pitched chirping is the soundtrack to Bermuda nights, were still singing even as the wind reached tropical storm force.

"It's loud out there. Nicole is here," wrote resident Katura Horton-Perinchief on Facebook.

Up to 2,000 people had lost power before 9am, local media reported, a significant number in a country with a population of around 65,000.

High-profile Bermudians overseas were also watching nervously.

"Sending prayers to my island @Bermuda," tweeted Ms Shiona Turini, recently profiled by the New York Times as stylist to singer Solange Knowles. "Hurricane Nicole may be a category 4 but we're tiny and strong."

"Stay safe everyone!" tweeted world champion triathlete Flora Duffy.

The NHC warned that a dangerous storm surge will raise water levels by as much as two to 2.5 metres above normal tide levels, accompanied by "large and destructive" waves.

It said Nicole is expected to produce rainfall of 10 to 20 centimetres over Bermuda.

The hurricane will also spread surf swells north along the east coast of the United States over the next few days, and could also spawn tornadoes, it said.

Last week, Hurricane Matthew caused massive devastation in Haiti and other Caribbean countries before sweeping up the US south-east coast.