A man who police say detonated a small, improvised explosive device in an underground passageway near the Port Authority Bus Terminal in Midtown Manhattan on Monday reportedly was inspired by Islamic State terrorists but had no direct contact with the group.

Despite the rush-hour crowds, only three people suffered minor injuries from the explosion that police said occurred at 7:20 am in an underground passageway connecting the Times Square and Port Authority subway stations between Seventh and Eighth avenues.

The incident caused thousands of passengers to flee the area and for hours halted all public transit to and from the Times Square area and the bus terminal, one of the nation's busiest.

New York Police Commissioner James O'Neill identified the suspect as Akayed Ullah, 27, an immigrant from Bangladesh. The Associated Press reported that the suspect lived with his father, mother and brother in a Brooklyn neighborhood with a large Bangladeshi community.

Ullah had been licensed to drive a livery cab between 2012 and 2015, but the license was allowed to lapse, AP reported, citing law enforcement officials and New York City's Taxi and Limousine Commission.

O'Neill said in a news conference that Ullah was wearing an "improvised low-tech explosive device" attached to his body, which he intentionally detonated.

He suffered burns to his hands and abdomen and was in serious condition at Bellevue Hospital Center, according to Daniel Nigro, the commissioner of the Fire Department of New York.

Law enforcement officials said Ullah was inspired by ISIS but apparently did not have any direct contact with the group and probably acted alone, according to the AP.

When asked if Ullah made statements about ISIS, O'Neill said the suspect did make statements, but the commissioner did not go into detail.

Ullah chose the location where the device exploded because of its Christmas-themed posters, recalling strikes in Europe against Christmas markets, he told investigators, and set off the bomb in retaliation for US airstrikes on ISIS targets in Syria and elsewhere, several law enforcement officials said, according to The New York Times.

As of Monday afternoon, Ullah had not been formally charged, but he will likely be prosecuted in federal court, authorities said.

Department of Homeland Security Press Secretary Tyler Houlton said that the suspect "is a lawful permanent resident" and had entered the US in 2011 from Bangladesh on a chain migration visa. He had used a passport displaying an F43 family immigrant visa in 2011.

John Miller, the police department's deputy commissioner for counterterrorism and intelligence, told reporters a pipe bomb was "affixed" to the suspect "with a combination of Velcro and zip ties". Miller said investigators are collecting pieces of the device to determine its composition.

"Our lives revolve around the subway," New York Mayor Bill de Blasio said at a news briefing. "The choice of New York is always for a reason, because we are a beacon to the world. And we actually show that a society of many faiths and many backgrounds can work."

Such an incident "is a fact of life, whether you're in New York or London or Paris," Miller said during the briefing. "The question is, 'Can it happen here?' and the answer is, 'It can happen anywhere.'"

White House press secretary Sarah Huckabee Sanders said during a news briefing on Monday that US President Donald Trump's immigration policy has called for halting chain migration. Had such a policy been in place in 2011, it may have prevented the suspect from coming to the US, Sanders said.

Monday's attack occurred six weeks after Sayfullo Saipov, who immigrated to the US from Uzbekistan through the diversity visa program, plowed a rented truck into people walking and cycling on a pedestrian path on Manhattan's West Side, killing eight people and injuring a dozen others.

"I'm glad I wasn't there. We were supposed to take a bus out at the time (when the accident happened), so I'm glad we waited," said Monica Gannon, who planned to take the bus back to New Jersey when the explosion happened. "We are stuck here. Now we are waiting for all this to be over and go back home."

"It was terrible, and I was so scared when I saw some people running," said Alicia Carmona. She said she was evacuated from the terminal after the explosion and had to wait outside the bus terminal for about two hours.

Carmona said she planned to pick up her niece at LaGuardia Airport at around 9 am, but now she couldn't make it. "I was thinking to take the subway instead, but the nearby subway stations are closed, too."