Two buses have crashed into each other in the heart of New Jersey's largest city, killing one of the drivers and injuring 18 people, seven critically.

The driver of a New Jersey Transit bus carrying no passengers died when the vehicle slammed into the side of another NJ Transit bus carrying about 20 passengers at around 6am local time in Newark.

"We're praying for all of those in the hospital," mayor Ras Baraka said.

Jennifer Petrain, who was opening up a Starbucks about 100 yards from where the accident occurred, said she heard a crash "like an explosion" and ran outside.

She and a co-worker brought ice water, rags and a first aid kit, she said.

"We were there before anybody was on the scene," Ms Petrain said. "It was terrible. We saw people with head injuries, leg injuries."

The force of Friday's crash left the westbound bus embedded in the side of the northbound bus, which had come to rest on a central reservation tipped at a 30-degree angle.

Firefighters could be seen pulling passengers through a side window and loading them on to waiting stretchers and into ambulances.

Investigators were trying to determine if the driver who died went through a red light, Mr Baraka said.

The intersection was the first in the state, in 2009, to feature a surveillance camera designed to catch people going through red lights. Then-mayor Cory Booker conducted a demonstration in which he purposely rode through a red light.

The red light camera programme ultimately expanded to about two dozen towns and cities in New Jersey before it was discontinued in 2014 amid controversy and lawsuits.

Officials in Newark and other towns claimed the red light cameras reduced accidents. Critics disputed that and said the cameras were mainly used to rake in cash for cities and towns.

The crash occurred as the bus without passengers began its route between Newark and Dunellen; the other bus was travelling between Irvington and Clifton, NJ Transit spokeswoman Nancy Snyder said.

The Essex County prosecutor is investigating the crash.