U.S. forecasters say a tropical storm is heading toward the Cayman Islands and may strengthen into a hurricane by Friday.

At last report (1500 Universal Time), Tropical Storm Paloma was located in the Caribbean about 430 kilometers southwest of Grand Cayman.

The National Hurricane Center in Miami says the storm has winds of 75 kilometers per hour, and is expected to strengthen over the next days.

Forecasters say Paloma could produce up to a third of a meter of rain over parts of the Cayman Islands.  The island's government has issued a hurricane watch.

Forecasters say Cuba and Jamaica should be alert for storm developments.

Currently, a tropical storm watch is in effect for parts of Nicaragua and Honduras, but the watch is expected to be discontinued later Thursday as Paloma moves away from the region.