Annie the dog looks out over what used to be a large yard and an outbuilding that is now flooded by the rising Red River in Fargo, N.D. (Carolyn Kaster/Associated Press)

North Dakota has been declared a federal disaster zone as the rising Red River continues to cause statewide flooding.

North Dakota Gov. John Hoeven said the declaration, announced early Wednesday by U.S. President Barack Obama, means the federal government will pay 75 per cent of state and local government costs to fight the flood.

Fargo residents, in the eastern part of the state, are rushing to build dikes ahead of the river's predicted crest on Friday. Thousands of volunteers are racing to fill the estimated 2 million sandbags needed to shield the community from the rising water.

"When you see people stacking, working all day, 24 hours a day like this, you know you're living in the right place," said Fargo resident Kenyon Williams. "You've got great neighbours and you've got a great community and there's nothing to be afraid of."

Volunteers help place sandbags outside a home in Moorhead, Minn., on Tuesday. (Richard Tsong-Taatarii/Associated Press)

The National Weather Service predicted the river would crest at 12.4 metres on Saturday afternoon, a crest level that Fargo Mayor Dennis Walaker said is in "uncharted territory."

The Red River's record high in Fargo was 12.1 metres in 1897.

The city has decided to build 13-metre dikes, a metre higher than initially planned, due to the weather service's high crest estimate. Evacuation plans are being crafted in case of emergency.

"Are we confident we're going to beat this? Yes we are," said city commissioner Tim Mahoney.

Residents were equally optimistic.

"We'll do the best we can and see what the Lord does. Maybe he'll hold back the flood," said Chuck Perkins.

Demolition crews called in to destroy ice jams

Meanwhile, ice jams have formed along the Missouri River, with dangerous volumes of water pooling behind them.

Emergency officials attempted to blast through a jam about 17 kilometres downstream from the city of Bismarck.

Demolition crews were flown to the area by helicopter to drill holes in the ice and lay down explosives. The crews were tethered for their safety, with two boats on standby during the dangerous work.

By Wednesday night, some of the water appeared to be moving.

"We are cautiously optimistic," Bismarck Mayor John Warford said.

A second ice jam has formed about 16 kilometres upstream from Bismarck.

Evacuations ordered

While emergency crews worked on the jam, about 1,700 people were ordered out of low-lying areas nearby for fear of major flooding.

"We just grabbed a bag, threw some stuff in and left," said Jane Pole of Fox Island.

The U.S. National Weather Service posted a flash-flood warning for three counties, saying the integrity of the second jam is unpredictable.

The Army Corps of Engineers cut water releases from the Garrison Dam to ease the flooding, which also means a cut in power generation at the dam.

People in nearby communities fear the flooding may prove to be as disastrous as in 1997, when tens of thousands of people were forced to flee their homes in North Dakota, Minnesota and southern Manitoba. In the United States, 11 people died as a result of the 1997 flood, which caused an estimated $4.1 billion US in damages.

Officials are predicting river levels this time will be higher than the devastating 1997 levels.

The river has been swollen by heavier-than-average snowfall and an early freeze that locked moisture into the soil.

The threat of the rising waters has been made worse by the forecast for spring rain and a call for 20 centimetres of snow in some areas.

With files from the Associated Press