The land border between the U.S. and Canada has been closed after a car exploded at a checkpoint following a warning of an 'increasing terrorist threat' to New York. 

Two people died in the vehicle when it erupted in an enormous explosion at the Rainbow Ridge checkpoint at Niagara Falls. A border agent has been hospitalised.

The City of Niagara Falls says the car was trying to enter the U.S. from Canada. 

All four land checkpoints between the U.S. and Canada were closed after the explosion.

It comes just two days after an intelligence report signalled increased risk of a terror attack in New York City.

CBS reported that there was 'an increasing terrorist threat to New York State tied to the Israel-Hamas war.

'Increase in civilian casualties raises the likelihood that violent extremist threat actors will seek to conduct attacks.'

The FBI Terrorism Task Force is investigating.

'The FBI Buffalo Field Office is investigating a vehicle explosion at the Rainbow Bridge, a border crossing between the US and Canada in Niagara Falls. 

'The FBI is coordinating with our local, state and federal law enforcement partners in this investigation. 

'As this situation is very fluid, that's all we can say at this time,' the bureau said.