Coastal residents from South Carolina to New Jersey boarded up homes and businesses and stocked up on batteries, water and other supplies.

The storm's progress toward the coast prompted weather officials to issue a hurricane watch from Little River Inlet northward to Chincoteague, Va. A tropical storm watch is in effect south of Little River Inlet to the South Santee River.

A watch means an area could face storm conditions within 36 hours.

North Carolina Gov. Mike Easley declared a state of emergency, allowing him to use the National Guard and also seek federal disaster relief after the storm passes. Easley urged residents to evacuate low-lying coastal areas.

"Now is the time to prepare," he said. "The course and intensity of this storm may change very quickly."

He said most injuries and fatalities "don't occur in the storms. They occur the day after."

The state suspended regular scheduled ferry service to isolated Ocracoke Island and other ferry routes operated only as conditions permitted, the governor said.

Two shelters were opened and shelters in all 100 counties would be able to open in an hour or less. The state also was moving transportation workers to eastern North Carolina to be help with debris removal.

Brunswick County Schools will close at 12:30 p.m. Wednesday, close all day Thursday and will open on a two-hour delay Friday.

Brunswick County is calling for a voluntary evacuation beginning at 2 p.m. Wednesday and is opening up its high schools for shelters.

Brunswick County can expect several hours of gale force winds as Hurricane Isabel makes landfall north on the Outer Banks. Flooding is not expected to be a problem, with two to three inches of rain in the forecast.

In South Carolina, Horry County is continuing to operate at a Level 4 Operating Condition, which puts the county on "Alert" status. The status means county officials have had continual discussions with S.C. Emergency Management and other coastal communities and will continue to monitor the storm closely.

Gov. Mark Sanford and his emergency preparedness team received hourly updates on Hurricane Isabel as portions of the state were placed under a tropical storm watch Tuesday.

``We don't think any evacuation is necessary at this point, but if there is a sudden turn, our emergency responders are ready,'' said Will Folks, the governor's spokesman.

Sanford held conference calls early Tuesday with the team and later with mayors and county officials from along the Grand Strand, Folks said. "They are continuing to watch the storm closely, they are monitoring it on an hourly basis," he said.

If the storm turns and hits the state, Sanford could call on members of the South Carolina Air National Guard who stand ready with generators, emergency light systems or heavy equipment, Lt. Col. Les Carroll said.

``Our people and equipment are available,'' said Carroll, spokesman at McEntire Air National Guard Station near Eastover.

Forecasters said Isabel appeared to be on a course to hit Thursday on the North Carolina coast and move northward through eastern Virginia. Large swells and dangerous surf already were being felt along the coast.

The storm's maximum sustained wind had decreased to about 105 mph. More weakening was possible but the storm could strengthen again before landfall, the National Hurricane Center said in Miami.

The latest evacuation order was for the low-lying Outer Banks islands, which includes an estimated 75,000 people from Hatteras to Duck, 30,000 of them permanent residents, in Dare County. An additional 15,000 to 20,000 were urged to leave the beaches of Currituck County that extend from Duck to the Virginia state line. A day earlier, hundreds of residents of vulnerable Ocracoke and Bald Head islands were ordered to evacuate.

Thousands of vacationers and residents left Outer Banks on Tuesday but traffic was moving smoothly. With the storm weakening, many residents appeared ready to stay put.

On Hatteras Island, Margie and Joe Brecker screwed plywood onto the door and windows of their Christmas gift shop in Rodanthe, but left up the colored holiday lights. They planned to stay.

``That way, we are right here when it's time to clean up, and we're able to help others,'' Margie Brecker said.

Despite the order, Dare County spokeswoman Dorothy Toolan said no one would be forced to leave.

At 8 p.m. EDT, Isabel was about 545 miles southeast of North Carolina's Cape Hatteras, moving northwest at around 8 mph. It was down to a Category 2 storm on the Saffir-Simpson Hurricane Scale of intensity, from Category 5 over the weekend.

Hurricane center meteorologist Eric Blake said people should not let their guard down even though the storm was weakening.

``Hurricanes are notorious for gaining strength as they cross the Gulf Stream,'' he said. Even at a Category 2, he added, ``there's still a lot of potential for danger.''

North of Manteo in Virginia, ships from the Navy's Atlantic Fleet started heading out to sea Tuesday from Norfolk, Va., and Earle, N.J., to sail out of the hurricane's direct path and avoid being battered against their piers. The Air Force had started flying airplanes from coastal bases to fields inland.

Moving the ships, manned by some 13,000 sailors, costs ``in the millions'' but the expense would be far greater if the ships were battered in port, said Adm. Robert J. Natter, commander of the Norfolk-based Atlantic Fleet. ``We cannot afford to have these very expensive, valuable national assets caught in port in a storm like this.''

Isabel hadn't veered from its expected track, said Lt. Dave Roberts, a Navy meteorologist at the hurricane center. After landfall it could spread heavy rain from North Carolina all the way to the New England states, he said.

Emergency officials in Maryland and Pennsylvania, where the ground already is saturated in places by a wet summer, had started planning for the possibility of high wind and heavy rain by Friday morning.

The storm could enter Pennsylvania with wind just below the hurricane-strength threshold of 74 mph, said weather service meteorologist John LaCorte in State College, Pa.

New Jersey officials started preparations in areas where Isabel could cause flooding, including Bound Brook, where the Raritan River peaked at 20 feet over flood stage when Hurricane Floyd struck in 1999, and two people died.

Virginia Gov. Mark R. Warner had already declared a state of emergency, putting National Guardsmen, state police and transportation crews on full alert and activating about 500 National Guard troops.

Isabel is the first major hurricane to threaten the mid-Atlantic since Floyd wreaked havoc on the East Coast in September 1999, causing 56 deaths.