Nine people were feared killed yesterday after a helicopter carrying Italian tourists collided with a light plane over New York's Hudson River.

New York Mayor Michael Bloomberg said two deaths were confirmed and that there was almost no hope of finding survivors after the accident, which took place in full view of horrified residents.

The helicopter was carrying five Italian tourists and a pilot. Two passengers, including one child, and a pilot were aboard the single-propeller plane, the mayor said.

"At this point we have found two bodies," Bloomberg said in a live televised press conference. "One we believe was floating free and the other the divers have recovered."

There was little hope left of finding survivors, Bloomberg indicated, saying the accident appeared to be "not survivable".

"This has changed from a rescue into a recovery mission," a grim-faced Bloomberg said, flanked by aviation and emergency services officials.

The collision took place just after 5 p.m. on a hot summer day when river-front streets were crowded with locals and tourists.

Witnesses described the two aircraft plummeting into the water after colliding.

"It hit the water like a stone," a woman told NY1. "I saw a piece of metal, I saw a helicopter, the helicopter went down, and that was it. I heard no noise, and no smoke or fire."

Some witnesses said the accident had been almost noiseless, but some reported hearing either the collision or impact against the river.

"We heard a really loud crash which sounded like lightening or thunder," another woman said. "They were both falling from the sky."

Witnesses also spoke of seeing debris - either part of the plane's wing or fragment of the chopper's rotor - fluttering down.

Bloomberg said that one piece of wreckage had been found by divers working in dangerous conditions and poor visibility in the Hudson.

Live television footage showed rescue craft crowded into the river between Manhattan and New Jersey.