MIAMI (AP) -- Forecasters say Tropical Storm Paloma has formed off the coast of Nicaragua with winds reaching 40 mph, and could strengthen into a hurricane by Friday.

The National Hurricane Center in Miami shows the storm could make landfall over Cuba as a hurricane. The track shows it could weaken and continue toward the Bahamas. A tropical storm watch has been issued for parts of Honduras and Nicaragua, and several inches of rain are expected in those countries.

Forecasters say the storm is centered about 70 miles east-northeast of Cabo Gracias a Dios on the Nicaragua-Honduras border and may also hit the Cayman Islands.

Paloma is moving toward the north-northwest at about 7 mph. It is expected to gradually turn toward the north, then to the northeast toward Cuba.

For the latest on Tropical Storm Palmoa, visit our Online Hurricane Center.