Tropical Storm Paula, the 16th named storm of the busy 2010 Atlantic hurricane season, formed on Monday near Honduras and is expected to blow into a hurricane by Tuesday as it nears Mexico's Yucatan peninsula, the National Hurricane Center said.
By early afternoon, the storm had winds of 60 mph and was about 130 miles east-southeast of Isla Guanaja, Honduras.
The government of Mexico has issued a hurricane warning for the country's coast from Punta Gruesa north to Cancun, including Cozumel. The coast of Honduras is under a tropical storm warning.
Forecasters say the storm will produce heavy rains that could cause flash floods and mudslides especially in the mountains in Nicaragua and Honduras.
Coastal flooding from heavy waves is also expected along the east coast of the Yucatan Peninsula and the Bay Islands of Honduras.
The six-month Atlantic hurricane season, which typically ends by Nov. 30, has produced five major hurricanes this year out of the eight that have formed. The United States has so far escaped a significant landfall.