* Earl seen becoming major hurricane this week
* Hurricane watches, warnings for eastern Caribbean
* Danielle moving farther from East Coast
MIAMI, Aug 29 (Reuters) - Tropical Storm Earl was poised to become a hurricane on Sunday as it threatened islands in the eastern Caribbean, while Hurricane Danielle weakened to a Category 1 storm, the U.S. National Hurricane Center said.
Hurricane warnings and watches were posted for several Caribbean islands, as Earl followed a track toward the Northern Leeward Islands.
It had top sustained winds of 65 miles an hour (105 kph), the Miami-based hurricane center said in its 5 a.m. (0900 GMT) advisory. The storm center was about 420 miles (675 km) east of the Northern Leewards and moving west near 18 mph (29 kph) on course to reach the islands as early as Sunday night.
"Most of the guidance suggests Earl will become a hurricane in 12 to 24 hours and r'each major hurricane strength in 72 to 96 hours," the hurricane center said.
Forecasts showed it turning west-northwest in the next 48 hours before accelerating northward off the U.S. East Coast later in the week, far from the oil-producing Gulf Coast region.
A hurricane warning was in effect for Antigua and Barbuda, St. Kitts and Nevis, the British overseas territories of Montserrat and Anguilla, the French overseas islands of Saint Martin and Saint Barthelemy and the Dutch overseas islands of St. Maarten, Saba and St. Eustatius.
There was a hurricane watch for the U.S. and British Virgin Islands and Puerto Rico, including the islands of Culebra and Vieques.
Earl threatened the eastern Caribbean islands with a storm surge, battering waves and heavy rains, the hurricane center said.
Hurricane Danielle's top sustained winds fell to 90 mph (145 kph) and the storm, once a major Category 4 hurricane, was moving quickly northeast past the British island territory of Bermuda and farther from from the U.S. East Coast.
It was expected to weaken gradually in the next two days and lose its tropical characteristics by Monday night.
The hurricane center said it expected large waves and dangerous surf conditions to diminish near Bermuda on Sunday and subside slowly along the U.S. East Coast within the next two days.
"It looks like we dodged a bullet," 31-year-old Bermuda bank employee Stuart Roberts said of Danielle.
Danielle caused dangerous rip currents along the U.S. East Coast on Saturday, forcing the rescue of dozens of swimmers, according to media reports.
(Reporting by Peter Cooney in Washington, Sam Strangeways in Bermuda; Editing by Angus MacSwan)
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