A powerful earthquake hit the Pacific island of Vanuatu on Tuesday, severely damaging buildings in the capital Port Vila including one housing foreign embassies, with a witness telling AFP of bodies lying in the street.

The 7.3-magnitude quake struck at a depth of 57 kilometres (35 miles), some 30 kilometres off the coast of Efate, Vanuatu's main island, at 12:47 pm (0147 GMT), according to the US Geological Survey.

The ground floor of a building housing the US and French embassies had been crushed under higher floors, resident Michael Thompson told AFP by satellite phone after posting images of the destruction on social media.

"There's people in the buildings in town. There were bodies there when we walked past," Thompson said.

A landslide on one road had covered a bus, he said, "so there's obviously some deaths there".

The quake also collapsed at least two bridges, said Thompson, who runs a zipline business in Vanuatu, and the ground floor of a concrete building housing diplomatic missions had been flattened.

"That no longer exists. It is just completely flat. The top three floors are still holding but they have dropped," he said.

"If there was anyone in there at the time, then they're gone," he said.

Most mobile networks had been cut off, Thompson said.

"They're just cracking on with a rescue operation. The support we need from overseas is medical evacuation and skilled rescue, kind of people that can operate in earthquakes," he said.

Video footage posted by Thompson and verified by AFP showed uniformed rescuers and emergency vehicles working on a building where an external roof had collapsed onto a number of parked cars and trucks.

The streets of the city were strewn with broken glass and other debris from damaged buildings, the footage showed.

A tsunami warning was issued after the quake, with waves of up to one metre (three feet) forecast for some areas of Vanuatu, but soon lifted by the Pacific Tsunami Warning Center.

Waves of less than 30 centimetres (one foot) above the tidal level were predicted for other Pacific island nations including Fiji, Kiribati, New Caledonia, Solomon Islands and Tuvalu.

Earthquakes are common in Vanuatu, a low-lying archipelago of 320,000 people that straddles the seismic Ring of Fire, an arc of intense tectonic activity that stretches through Southeast Asia and across the Pacific basin.

Vanuatu is ranked as one of the countries most susceptible to natural disasters such as earthquakes, storm damage, flooding and tsunamis, according to the annual World Risk Report.