"It was just sitting there and there was nobody sitting there and the hazards were on and nobody's in there," said another vendor, Rallis Gialaboukis, who saw the whole thing. "I think that by putting the hazards on might have made people think that it was stalled or it was overheating."
The mounted officer noticed a smoking box in the back of the Nissan Pathfinder, police said.
The New York Police Department's bomb squad was called in, and the back window of the SUV was broken out. Police sent in a robot to determine what was in the vehicle.
While the bomb squad robot was checking out the vehicle, the NYPD quickly blocked off 44th Street through 48th.
Bomb technicians from the FBI's New York office were called to the scene to assist the NYPD Bomb Squad in the investigation.
Shortly after 7 p.m., witnesses told WABC-TV they heard an explosion, then saw smoke coming from the car.
"It was a boom and a puff of smoke," one man said.
"I saw people running, turning tables," Paula Delarrosa said.
A live webcam feed at 46th Street and Broadway Saturday evening showed the streets had been cleared of pedestrians. A line of police cars blocked one street and officers paced on a sidewalk.
In the hours that followed, Broadway remained empty.
"I came to dinner," said visitor Tony Rosenthal. "We were going to go see the show 'Come Fly Away' at the Marquis Theater, and the street's closed. I don't know if we'll be able to see the show."
Another observer, Joy Adler, said, "It's pretty scary. I mean, this is really scary. You hear about it on TV and to actually see it, very scary."
The New York case may not be the first of its type, Clarke told "Good Morning America."
Days before an attempted car bomb attack at an airport in Glasgow, Scotland in June 2007, devices similar to the one in New York, using propane tanks and gasoline, were planted in two cars in downtown London but failed to explode.
"In that case, it was made by Islamic jihadists who were not part of the al Qaeda but had learned about al Qaeda, studied it on the Internet, learned how to make the bomb on the Internet," Clarke said.
As in New York, the first London vehicle was discovered when a passerby noticed smoke coming from the back seat of the vehicle. The other car unwittingly was towed for being parked illegally and the bomb was discovered later.
ABC News' Ron Claiborne, Jim Sciutto and Aaron Katersky contributed to this report