MIAMI, Aug 23 (Reuters) - A tropical depression formed over the Turks and Caicos Islands on Saturday after drenching Puerto Rico and the Dominican Republic, and could become a hurricane as it moves over the warm open waters near the Bahamas, the National Hurricane Center (NHC) said.
A tropical storm warning was issued for the Turks and Caicos islands and the southeast and central Bahamas as the weather system passed about 75 miles (120 km) northeast of Great Inagua island, with winds gusting over 35 miles an hour (55 km per hour).
An Air Force Reserve Hurricane Hunter aircraft "found a well-defined circulation this afternoon," the NHC reported on Saturday. It could become a category one hurricane with 75 mph (120 kph) winds within three days, it added.
Forecast models show the storm passing to the east of the Florida peninsula and continuing to curve north-eastward over the Atlantic during next week, staying off the U.S. coast.
Heavy rain fell overnight and into Saturday in Puerto Rico and several towns were under a flash flood watch.
"We will be affected for the rest of the day and into tomorrow morning," said National Weather Service meteorologist Tony Estrada.
The heavy rains filled up Lake Carraizo and the La Plata River, two of the main water sources for the capital city, San Juan, eliminating the threat of water rationing after months of unseasonably dry weather.
In the Dominican Republic an estimated 790 people were displaced after at least 158 homes were flooded, the National Center for Emergency Operations said on Saturday.
Communication was severed with at least 10 communities by flooded roads and damaged bridges.
Flash flood and mudslide warnings were in place in 17 of the country's 31 provinces.
Federal forecasters in August downgraded their outlook for the 2014 Atlantic hurricane season, predicting below-normal activity with seven to 12 named storms, and no more than two expected to reach major hurricane status.
A major hurricane is considered to be Category 3 or above with winds hitting at least 111 mph (178 kph).
So far this year two hurricanes - Arthur and Bertha - have developed in the Atlantic. Only Arthur, a Category 2 storm, made landfall, on North Carolina's Outer Banks in early July.
A typical season has 12 named storms, with six hurricanes, and three becoming Category 3 storms.
In its August outlook, the agency said cooler-than-average temperatures in the tropical Atlantic Ocean would make it difficult for larger storms to develop. (Reporting by Zachary Fagenson in Miami and; Ezra Fieser in Bavaro, Dominican Republic.; Editing by David Adams, Bernard Orr and Lisa Shumaker)