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The crane was split into pieces as it fell, pulverizing a four-story townhouse and doing heavy damage to parts of five other buildings. A man was pulled from the townhouse nearly four hours after the building was crushed.

It's believed the four people killed in the disaster were all workers at the construction site. At least 10 people were hurt, in one of the city's worst construction accidents in recent memory.

Maureen Shea was lying in bed and talking on the phone Saturday when she looked out her window and saw bricks raining from the sky and the toppling crane raking across the buildings in her neighorhbood.

"I heard a big crash, and I saw dust immediately. I thought the crane was coming in my window," said the 66-year-old retired banker.

Cars nearby were overturned and crushed. A huge dust cloud rose over the neighborhood. Rubble was piled several stories high.

"It's a horrible situation, very gory. There's blood in the street," said Lieutenant Governor David Paterson, who takes over as governor for disgraced Eliot Spitzer on Monday.

An intense rescue operation was under way to find anyone who might be trapped in the rubble on 51st Street near Second Avenue.

Fire Commissioner Nicholas Scoppetta said the rescue was "a painstaking hand operation, as we try to remove the rubble so we don't cause further collapse or injure anyone who may still be in that building." He said the operation would continue all night if necessary, including the use of search dogs and thermal-imaging and listening devices.

John LaGreco owned a tavern called Fubar that was closed when the brownstone was crushed. He said his business is "done," and that an employee of his, Juan Perez, was the man pulled from the rubble. He said Perez suffered a broken leg. All of his employees were accounted for.

"Our bar is done," he said. "The crane crashed the whole building. If I wasn't watching a Yankees game, I would've come to work early and gotten killed."

Not quite half of the 43-story condominium is built. Workers were starting on a fresh story Saturday, said an owner of the company that manages the construction site.

It appears that a piece of steel fell and sheared off one of the ties holding the crane to the building, causing it to detach and topple, said Stephen Kaplan, an owner of the Reliance Construction Group.

"It was an absolute freak accident," Kaplan said. "All the piece of steel had to do was fall slightly left or right, and nothing would have happened."

Kaplan said the company had subcontracted the work to different companies and was not in charge of the crane. Phone messages and an e-mail left for the crane's owner, New York Crane & Equipment Corp., were not immediately returned.

James Kennelly, the lead partner at East 51st Development Company, which owns the property, issued a written statement expressing the group's dismay over the accident.

"There are no words to describe the level of devastation we feel today as a result of this tragic event," he said, extending prayers to the families of the dead and injured.

Neighborhood residents said they had complained to the city several times about the construction at the site, saying crews worked illegal hours and the building was going up too fast. In fact, city officials said they had issued 13 violations to the site in the last 27 months, but described that as a normal amount for a project of that size. Inspectors examined the crane Friday and found nothing wrong with it.

New York Crane was involved in a 2006 mishap, in which a 13-foot piece of a crane mast that was being dismantled fell into the street and crushed a taxi cab.

At a Donald Trump hotel-condominium tower, a worker plummeted 40 stories to his death last month when a concrete form gave way. A month before that, a crane's nylon sling broke away and dropped seven tons of steel onto a construction trailer across from ground zero, injuring an architect.

Reactions

We continue our coverage this morning with the residents in the area who are still not allowed back into their homes. Eyewitness News reporter Tali Patillo has more from outside the Red Cross center.

People who live in and around the collapse zone were evacuated. One of temporary shelters are located outside of High School of Art and Design.

Witnesses say they heard the rumble and described the rushing right into the street after the collapse.

"All of a sudden, I heard two or three loud explosions and then lobby of my building blew up," said evacuee, Pamela Mohr.

Pamela Mohr was in her apartment building next to the construction site taking a shower when the giant crane collapsed.

She along with many other residents in neighboring buildings gathered up their loved ones and ran away from the huge cloud of smoky debris.

"All the debris from that corner kind a fell down on our roof," said evacuee Stefan Pokorny. "And if we're like five feet to the left...and we all would have been pancakes."

Neighbors say the force of the crane hitting the building rumbled and shook the entire neighborhood.

"The whole place started trembling and I was like, what's going on? I ran into the window and I saw from the window that the whole crane was coming down into our garden," said Stefan Pokorny. "At that moment, I thought that's it, I'm dying."

The Red Cross set up a reception area for displaced residents at the Art and Design High School on East 57th Street where many evacuees sought out more information on the safety of their buildings.

"I don't know how much damage was sustains our building, they are supposedly checking all the buildings out in the area," said evacuee Andrew Cenpa.

Before residents can return home, inspectors have to determine that the buildings are structurally sound. In the meantime, temporary shelters will remain open.

Street closures:

As you would have imagined, many streets all around that 'crane collapse area' are closed off to traffic. They include:

Second Avenue: From 52nd Street down to 42nd Street. There is traffic diversion at 57th Street Between First Avenue to Third Avenue on 49th Street, 50th Street and 51st Street are closed.

Statement from the property owner

Just hours after the collapse, the property owner released a statement.

"Our heart and prayers are with the families of those who died in this horrible accident," James Kennelly says in the statement.

He went on to say "we hired Reliance Construction Group as our construction manager because not only do they have a strong reputation as quality builders, but also for their outstanding safety."