Fighter jets were mobilised but military leaders advised President Joe Biden against shooting the balloon out of the sky for fear debris could pose a safety threat, advice Biden accepted, US officials said on Thursday.

The US took "custody" of the balloon when it entered its airspace and had observed it with piloted US military aircraft, one of the officials told reporters on condition of anonymity.

Separately, Canada's defence ministry said a "high-altitude surveillance balloon" was detected and that it was monitoring a "potential second incident", without giving further details, adding it was in frequent contact with the US.

The news initially broke as CIA director William Burns was speaking at an event at Washington's Georgetown University, where he called China the "biggest geopolitical challenge" facing the US.

"The United States government has detected and is tracking a high-altitude surveillance balloon that is over the continental United States right now," Pentagon spokesman Brigadier General Patrick Ryder told reporters.

"The balloon is currently travelling at an altitude well above commercial air traffic and does not present a military or physical threat to people on the ground."

Chinese foreign ministry spokesperson Mao Ning said Beijing was "verifying" the situation.

"I would like to emphasise that until the facts are clarified, speculation and hype will not be helpful to the proper resolution of the issue," she told a regular daily briefing in Beijing on Friday.

US officials said they raised the matter with their Chinese counterparts through diplomatic channels.

"We have communicated to them the seriousness with which we take this issue," a US official said.

One US official said the balloon was assessed to have "limited additive value from an intelligence collection perspective".

Blinken is expected to travel to China next week for a visit agreed to in November by Biden and Chinese President Xi Jinping.

It was not clear how the discovery of the spy balloon might affect those plans.

US Senator Marco Rubio, the top Republican on the Senate intelligence committee, said the spy balloon was alarming but not surprising.

"The level of espionage aimed at our country by Beijing has grown dramatically more intense and brazen over the last five years," Rubio said on Twitter.

Republican Senator Tom Cotton called for Blinken to cancel his trip.

Republican House Speaker Kevin McCarthy said he would request a "Gang of Eight" briefing, referring to a classified national security briefing for congressional leaders and Republican and Democratic leaders of the intelligence committees.

Relations between China and the US have soured in recent years, particularly following then-US House Speaker Nancy Pelosi's visit to Taiwan in August, which prompted dramatic Chinese military drills near the self-ruled island.

Since then, Washington and Beijing have sought to communicate more frequently and prevent ties from worsening.

Spy balloons have flown over the US several times in recent years, but this balloon appeared to be lingering longer than in previous instances, one US official said.

Craig Singleton, a China expert of the Foundation for Defense of Democracies, said such balloons had been widely used by the US and Soviet Union during the Cold War and were a low-cost intelligence-gathering method.

Australian Associated Press