NEW YORK, US - A GIANT crane fell and crushed a residential building in Manhattan on Saturday, killing four construction workers and injuring more than 10 other people, New York Mayor Michael Bloomberg said.

He said the crane 'basically just flattened' a four-story townhouse with a bar on the lower level and damaged three other buildings. The bar was closed at the time.

Ms Greta Welkhammer, a witness who was passing by on her bicycle, told local TV station NY1 that she looked up and saw the crane 'literally split in half'.

Mr Bloomberg said the crane broke during a routine operation to extend its height by inserting a section and raising the top part of the crane. The bottom part of the crane fell and hit a 19-story building but nobody was injured there.

The top part of the crane, which witnesses said was at least 15 or 20 stories high before the accident, fell and flipped over, hitting and damaging three buildings as it fell and landing on the townhouse that was completely crushed.

Mr Bloomberg said authorities were investigating the cause of the accident and emergency workers were still searching in the rubble for anyone who might be trapped.

He said the four people killed were construction workers, and that several more workers were injured. An additional 10 people were injured, three of them critically, Mr Bloomberg said.

'Fortunately the bar was not open so there was either one or two people in that bar,' he said. One person was rescued alive from the bar and workers were searching to check if the second person was in fact in the bar at the time.

'We are still looking for other victims potentially trapped in the rubble,' Mr Bloomberg said.

Cars on the street were buried in rubble, with one car flipped over on its side on 50th Street in Midtown Manhattan between 1st and 2nd Avenues.

Local TV station NY1 broadcast an amateur video taken shortly after the collapse that showed the building completely enveloped in what appeared to be a cloud of brownish dust. -- REUTERS