Singapore late Thursday ordered emergency school closures as air pollution reached "hazardous" levels due to suffocating smoke from agricultural fires raging on a nearby Indonesian island.

Prime Minister Lee Hsien Loong also said face masks will be distributed at community centres across the island on Friday for needy and elderly citizens.

"There is no national shutdown of work, but employers should not compromise on the health and safety of their employees, especially those working outdoors," Lee said in a Facebook post.

"Please drink plenty of water, and avoid going outdoors if you can. Look out for neighbours and friends, and stay safe."

Education Minister Heng Swee Keat said the shutdown order for Friday will affect primary and secondary schools as well as kindergartens run by the ministry and special education schools.

Parents who cannot make alternative arrangements because of the short notice can still send their children to school, where they will be placed in air-conditioned rooms, he said, according to local media who attended a press briefing Thursday night.

Singapore's air quality steadily worsened during the day as thick smog blown in from forest fires on Indonesia's neighbouring island of Sumatra bore down on the city-state, which prides itself on its clean environment.

There were fewer people outdoors despite Thursday being a public holiday and more residents were seen wearing face masks.

Fastfood chains McDonald's and Pizza Hut suspended delivery service.

The National Environment Agency said the haze situation could further worsen because of the prevailing winds.

"As I walked around, the impact of the haze, on people, was obvious. I was coughing, eyes itching, the heat oppressive. Our senior citizens must be feeling much worse," Foreign Minister K. Shanmugam wrote on Facebook.

"The Singapore government takes the matter seriously. We stand ready to assist Indonesia in combatting the fires," he said.

A reading of the three-hour Pollutant Standards Index, showed the air quality deteriorating from "very unhealthy" earlier in the day to "hazardous".

The environment agency advised healthy persons to "avoid prolonged or strenuous outdoor physical exertion" and urged the elderly, pregnant women and children to minimise outdoor exposure.

- Indonesia under pressure -

Housewife Asnah Mohamad, 62, said she and her friend used their headscarfs to cover their face as they travelled to a mosque to celebrate the Muslim holiday of Eid al-Adha.

"My husband cannot leave the house because he has a heart condition so I represented him to collect the meat offerings," she told AFP, referring to the festival in which Muslims share the meat of a goat or sheep slaughtered as sacrifices.

"We hope it gets better soon. But what can you do? Go over there (to Indonesia) and pour water on the fire?"

The city-state has been cloaked in the haze in varying degrees for about three weeks, the worst such episode since mid-2013.

The haze situation has been made worse this year by an El Nino weather system, which produces tinder-dry conditions in Indonesia and increases the risk of fires.

Under pressure from its neighbours to stop the annual haze, Indonesian President Joko Widodo has pledged to crack down on companies and individuals behind the burnings, which are a cheap but harmful way of clearing vast tracts of land for plantations.

He said the government was trying its best to extinguish the fires by dropping water from helicopters and inducing rain through cloud seeding.

Indonesia's National Disaster Management Agency told AFP that 2,081 fire "hotspots" were recorded in the worst-affected region of Indonesia's Kalimantan and 290 in Sumatra on Thursday.

Singapore's Lee said the city-state has asked Indonesia to share the identity of companies responsible for the burnings so it can take action.

Singapore last year introduced legislation allowing it to prosecute companies found to be causing or contributing to the haze.