A tropical storm warning and hurricane watch have been issued for the coast of Honduras as tropical storm Richard approaches in the Caribbean.

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This satellite image taken early Friday morning shows tropical storm Richard located about 395 kilometres south of Grand Cayman in the Caribbean Sea. ((The Associated Press))

The watch and warning issued Friday cover the area from the border with Nicaragua west to Limon.

Richard's maximum sustained winds are near 65 km/h. But additional strengthening is forecast for the 17th named storm of the Atlantic season and it could become a hurricane over the weekend.

The National Hurricane Center in Miami said the tropical storm could dump rain on Honduras that could cause life-threatening flash floods and mud slides.

Richard is located about 240 kilometres east-northeast of Cabo Gracias a Dios on the Nicaragua-Honduras border and is moving west near 6 km/h.