The Category 3 storm's top winds increased to 125 mph, and forecasters warned it could return to Category 4 strength by Friday as it feeds on warm Atlantic waters. The stronger designation comes from winds that exceed 130 mph.

"It's moving over waters of 84, 85 degrees Fahrenheit, which could provide some fuel to it. We still think it could restrengthen back into a Category 4. The environmental conditions appear to be right," said Eric Blake, a hurricane specialist at the National Hurricane Center.

The storm warning means winds of 40 mph or more are expected to arrive within a day, and the island remained under a hurricane watch that indicates even stronger winds are possible within 36 hours.

The warning came a day after former U.S. President Bill Clinton and his wife, Secretary of State Hillary Rodham Clinton, arrived in Bermuda on Wednesday for a 3- or 4-day getaway.

The government urged islanders to secure boats and finish other storm preparations by Friday afternoon. Officials put up warning signs at beaches along the south shore because of large swells and dangerous rip currents expected ahead of the storm. Home Affairs Minister Walter Roban urged people not to swim until further notice.

Some flight delays are possible, said Aaron Adderley, general manager of Bermuda's L.F. Wade International Airport.

"At this point, it's fair to say that one can expect some disruption — but to what extent, remains to be seen," he said.

The storm's center is expected to pass between Bermuda and the U.S. eastern coast on Saturday. Forecasters warned large swells generated by the hurricane could cause extremely dangerous surf and rip currents at beaches on one of the final weekends of summer.

"Those swells are known to be deadly," Blake said. "It's just going to be very dangerous this weekend."

The center's five-day track showed Bill staying well out to sea off the southern and northern U.S. coast. Bill was forecast to inch closer to shore as it moves north but only come close to landfall in Canada's Maritime provinces before veering back out into the North Atlantic.

At 5 p.m. ET Thursday, the storm's was centered about 595 miles south of Bermuda, or about 1,080 miles southeast of Cape Hatteras, N.C. The storm was moving northwest around 18 mph.

Bill is the first Atlantic hurricane this year after a quiet start to the season that runs from June through November. The Miami center lowered its Atlantic hurricane outlook on Aug. 6 after no named tropical storms developed in the first two months.

The revised prediction was for three to six hurricanes, with one or two becoming major storms with winds over 110 mph. Researchers at Colorado State University have also lowered their Atlantic season forecast to four hurricanes, two of them major.

Enlarge NOAA A colorized satellite image shows Hurricane Bill's position in the Atlantic on Thursday morning.