Eight people are dead and 11 have been injured after a rented ute mounted a bicycle path in lower Manhattan, mowing down cyclists and runners for 17 blocks, then reportedly shouting "Allahu Akbar".

The 29-year-old driver, named by insiders as Sayfullo Habibullaevic Saipov, entered the bicycle path at Houston St at 3.05pm (local time) and drove downtown, knocking down victims before smashing into a school bus at Chambers St, according to the Daily Mail.

Two children and two adults on the bus were injured. They and seven other people are in hospital with serious, but non-life-threatening injuries.

Inside the rental truck, investigators found a handwritten note in which Saipov had declared his allegiance to the Islamic State, according to officials.

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The attack could intensify the political debate over immigration and security, the Washington Post reports.

President Donald Trump has argued for much tougher screening of immigrants to prevent terrorism, and opponents of those policies have sought to block his efforts in the courts. Uzbekistan was not among the countries named in any version of the president's travel ban, which largely targeted a number of majority-Muslim countries.

Trump responded to the attack on Twitter, saying it "looks like another attack by a very sick and deranged person.'' He tweeted a short time later: "We must not allow ISIS to return, or enter, our country after defeating them in the Middle East and elsewhere. Enough!"

There was no immediate indication that the attack had been directed by the Islamic State. However, the group has called on its supporters in Western countries to launch their own attacks, using anything at hand as weapons, including vehicles.

After eventually stopping his rented Home Depot truck, the terrorist emerged, waving a paintball gun in one hand and a pellet gun in the other.

He was shot in the stomach by an on-duty NYPD officer and is now in hospital under police supervision.

At a press conference at Police Plaza, New York Mayor Bill De Blasio condemned the attack as a "cowardly act of terror".

During the press conference, De Blasio said the act was "intended to break" the spirit of New Yorkers.

"We know this action was intended to break our spirit. But we also know New Yorkers are strong, resilient and our spirit will never be moved by an act of violence or an act meant to intimidate us."

The annual Halloween Parade will go on as planned despite the atrocity. There will be an increased police presence tonight and bolstered police patrols across the city in the coming days and week.

A man emerged from the truck carrying fake firearms. Photo / AP
A man emerged from the truck carrying fake firearms. Photo / AP

"Based on the information we have, this was an act of terror and a particularly cowardly act of terror aimed at innocent civilians, people going about their lives," he said.

De Blasio was joined by New York Governor Andrew Cuomo who prayed for those killed.

"It reminds us all how precious life is. They left the house the morning, they were enjoying the beautiful west side of Manhattan on a beautiful fall day and now they will not be returning home.

"That shock and that pain is going to be very real," he said.

President Trump described the perpetrator as a "sick" individual.

"In NYC, looks like another attack by a very sick and deranged person. Law enforcement is following this closely. NOT IN THE U.S.A.!" he tweeted.

First Lady Melania Trump, who was in Manhattan when the attack happened, said: 'My heart breaks for NYC today.

"Thoughts & prayers as we monitor the situation."

Despite the added security, city officials said there was no evidence that the attack was part of a wider terror plot.

Witnesses described hearing five to 10 gunshots, all of which came from police guns.

Others ran for their lives as they watched the truck plough into pedestrians after veering off the road.

Shocking video footage from the scene showed cyclists lying on the ground with their bikes smashed in to pieces around them. Passersby were seen tending to them as they awaited medical attention.

A badly damaged school bus is parked near the bike path where a truck ran down numerous people in Manhattan. Photo / AP
A badly damaged school bus is parked near the bike path where a truck ran down numerous people in Manhattan. Photo / AP

In the surrounding area, students were doing exams when they heard police firing shots.

Roza Kazan, a student at the Borough of Manhattan Community College, said she was in the middle of a statistics mid-term when the chaos unfolded.

She told DailyMail.com: "An announcer said in the middle of the test there had been a shooting. But he said there were so many police that it was safe to stay inside and carry on. So I finished the test.

"Then he came on again and said that the shooting occurred because someone had run people down in their car.

"I was getting a coffee on the corner where it happened just a couple of hours earlier. I can't believe the announcer was so calm. It made it seemed like what was happening wasn't serious."

A body covered by a white sheet lies next to a mangled bike on the bike path. Photo/ AP
A body covered by a white sheet lies next to a mangled bike on the bike path. Photo/ AP

Within minutes of the first reports, there was an enormous police and fire service presence at the site.

Ezequiel Gonzalez, 18, a speech coach at Stuyvesant High School, told DailyMail.com at the scene: "I heard what sounded like gas caskets and I went up on the bridge and saw a car caved in.

"Then I was pushed back and saw the ambulances arriving. The school was put on lock down."

John Williams, 22, told DailyMail.com he was there about 30 seconds after the gun shot: "I saw one man lying on the ground being looked after by paramedics and cops, another man getting arrested and what seemed like another man running towards the Hudson River.

"I came out and saw a man holding two guns. I could still smell the gun fire. It was a very strong scent. I was concerned for the safety of everyone because there was someone walking around with a gun."

Williams said he heard between five and 10 gunshots in total.

Witness Mohammad Hamza Amzher said the suspect looked Hispanic and strongly denied the man hearing him shout "Allah Akbhar". He saw him walking down the street wearing a hoodie and holding a gun.

At the time, school children were being let out of class after a day of Halloween festivities.

- Daily Mail