Two people died and another is seriously wounded after a crane collapsed Friday on Manhattan's Upper East Side.

The crane smashed into a 23-story high-rise apartment building at East 91st Street and First Avenue before tumbling down onto the street below. It was the second deadly crane accident in New York City in two-and-a-half months.

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The two men who died were identified as Ramadan Kurtas, 27, and the crane's operator, Donald Leo, 30, said Ellen Borakove, a spokeswoman for the New York City medical examiner's office.

The other construction worker was in serious condition, according to New York City Mayor Michael Bloomberg. One of the dead men had been in the cab of the crane. A pedestrian was also treated for minor injuries.

Bloomberg said that no one in the apartment building appears to have been hurt. Seven buildings were evacuated as a precaution, he said.

Firefighters and rescue workers combed through twisted steel, concrete and rubble in the search for more possible victims of the collapse.

Part of the crane is still standing and may not be stable. Firefighters barred people from the immediate area.

Bloomberg said on his morning radio show and in a news conference Friday that the collapse was "unacceptable" and "intolerable" and the city would investigate.

But, he added, there was a lot that wasn't yet known about the accident.

"We do not know at the moment what happened or why," Bloomberg told reporters.

He said that it appeared that the construction workers had followed regulations.

"Keep in mind that construction is a dangerous business and you will always have fatalities," said Bloomberg. "There is no reason to believe that it looked precarious. We have no reason to believe that there was anything we could have done to prevent this."

The crane, at the site of the future Azure condominium project in a mostly residential area, had just passed an inspection on May 20, according to the mayor and the New York City Department of Buildings. No violations were found, and no action was deemed necessary.

"They were fully in compliance with regulations," Bloomberg said. "It was done with an inspector and it was done properly."

He said procedures would be reviewed, however.

City building department records show that inspectors stopped crane work twice last month, once because they said a crane lacked the proper permit and was being operated in an unsafe manner.

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Click here video on efforts to secure the collapse site.

The mayor said the top part of the crane snapped off and fell against the building on the southwest corner of 91st Street and First Avenue around 8 a.m. Witnesses described a loud boom, then a cloud of smoke and debris.

"The sound was like a thunder clap. Then, an earthquake," said Peter Barba, who lives on the seventh floor of the building, across the street from the construction site.

Construction foreman Scott Bair identified one of the injured as Simeon Alexis and said he was taken to the hospital with his "chest slashed open."

Bair said the collapse occurred after he left the construction site to get an egg sandwich a block away. He ran back, took a roll call of his 40 workers and discovered Alexis was missing.

"Everyone was shook up and crying," he said. "These are some hardened men, but they were crying."

The top floor of 354 E. 91st Street, the nearby apartment building that the crane struck, was badly damaged in the collapse.

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The New York City Fire Department said it pulled people out of the rubble, but the conditions of all the victims weren't immediately known.

One body was brought out of the wreckage, placed on a gurney and covered in a white sheet. A construction worker knelt over the gurney, gently stroking the sheet.

Chaos enveloped the largely residential neighborhood of town houses and apartment high-rises as dozens of emergency vehicles raced to the scene during the morning rush hour.

Robert Lopez, manager of a Duane Reade pharmacy on the ground floor of the building that was hit, said he was 10 feet from the window when he heard "a big boom."

"Everybody was yelling and running and calling 911," he said. When he looked out again, he saw part of the crane had landed just feet from the window where he had been standing.

Video from the scene showed the upper-floor balconies of the apartment building were severely damaged and a hole extended several stories down the side of the building.

Brian Nurenberg, 37, was playing indoor tennis two blocks away when he heard the crash.

"It was a couple of loud sort of bangs, high in the air," he said. "It sounded catastrophic, and that's from two blocks away."

The general contractor on the project is Leon D. DeMatteis Construction Corp. of Elmont on Long Island. Spokesman Don Miller said Friday that Sorbara Construction, a subcontractor, was in charge of operating the crane. A woman who answered the telephone at Sorbara Friday said no one was available to comment.

The neighborhood, not far from the mayor's official residence, Gracie Mansion, has undergone a construction boom in recent years, with high-rises swiftly replacing older, low-rise brownstones.

Full of bars and casual restaurants, the neighborhood is populated with a mix of retirees, students and young professionals. Until recently, it had been considered one of Manhattan's more affordable neighborhoods.

Cranes at the site had generated several complaints in the neighborhood, including reports that safety barriers were breached and heavy loads passed over the heads of pedestrians, according to city building department records.

Inspectors found that most of the concerns were unwarranted, but they did temporarily order one crane at the site to stop all work on April 23 for not having the proper permit and for operating the crane in an unsafe matter.

Building Department records also said officials halted work after a crane on the site failed a "load test" on April 22. The crane passed a second test, however, the next day, and no violation was issued.

The accident happened 2 1/2 months after another crane collapsed, killing seven people about two miles south.

In the March 15 accident, contractors building a 46-story condominium near the United Nations were trying to lengthen the crane when a steel support broke, killing seven people.

A four-story town house was demolished and several other buildings were damaged.

A city inspector resigned after his arrest on charges of falsifying business records and offering a false instrument for filing.

In April, the city's buildings commissioner resigned, under fire over a rising number of deadly construction accidents that have left more than 26 construction workers dead in the past year.

Since then, the city has added extra inspections at building sites and required that its staff be on hand whenever the towering cranes were raised higher, a process known as a jump. Those procedures are still being revised.

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FOX News' Catherine Donaldson-Evans and The Associated Press contributed to this report.