An Iranian passenger jet crashed minutes after takeoff on Wednesday morning, shattering into flaming pieces and killing all of the 168 people on board.

The Caspian Airlines Tu-154M jet had been headed for Armenia when it took off from Tehran's Imam Khomeini International Airport late Wednesday morning.

Sixteen minutes after takeoff, it crashed near the village of Jannat Abad, about 120 kilometres northwest of Tehran. The nearest city to the crash site is Qazvin.

The cause of the crash was not immediately known.

One witness told The Associated Press that he saw the plane circling in the air with its tail on fire, shortly before the 11:30 a.m. crash.

"Then, I saw the plane crashing nose-down," 23-year-old labourer Ali Akbar Hashemi told The AP in a phone interview. "The impact shook the ground like an earthquake. Then, plane pieces were scattered all over the agricultural fields."

The falling Tupolev created a massive trench when it plunged into the ground, littering a 200-metre area with flaming wreckage, as well as with the bodies and belongings of the passengers themselves.

Civil aviation spokesperson Reza Jafarzadeh said the plane was carrying 153 passengers and 15 crew members at the time of the crash.

Arsen Pogosian, the deputy chairman of Armenia's civil aviation authority said most of the passengers were Iranian -- many from the country's large ethnic Armenian community -- though at least six Armenians and two Georgians were on board the flight.

Earlier Wednesday, a Russian news agency reported that some Russian nationals had also been on board the Tupolev aircraft.

A foreign affairs spokesperson in Ottawa said he was "not aware of any Canadians involved in the crash.

Among the Iranian passengers were eight members of the national youth judo team, two trainers and a delegation chief who were scheduled to train with the Armenian team for an upcoming competition in Hungary.

At Yerevan airport in Armenia, 45-year-old Tina Karapetian was devastated by the loss of her sister, as well as her six- and 11-year-old nephews, who were on board the flight together.

"What will I do without them?" she asked, before collapsing to the floor.

Aviation analyst Mark Miller told CTV News Channel that early reports suggested the plane had been trying to return to Tehran at the time of the crash.

"Their plane, according to Fars (News Agency), had reported some sort of technical problem and was attempting to return to the airport to make an emergency landing. Unfortunately the airplane caught fire and then crashed," he said.

Serob Karapetian, the chief of Yerevan's airport service, later said the Caspian Airlines jet may have attempted an emergency landing, but would not confirm that the plane caught fire in the air.

President Mahmoud Ahmadinejad issued a statement with his condolences and called for a swift investigation into the crash that had caused a "heart-wrenching tragedy."

Armenian President Serge Sarkisian declared Thursday as a day of mourning.

Miller said the Caspian Airlines plane that crashed was very similar to a 727 jet.

Caspian Airlines is a Russian-Iranian company that was founded in 1993. Its fleet is made up of Tupolevs.

Iran has had a number of serious airplane crashes in recent years:

A Tu-154 aircraft operated by Iran Airtour crashed while landing in February 2006. Twenty-nine people were killed out of the 148 people on board.

Four years before, another Tupolev operated by Iran Airtour crashed in mountains in western Iran. All 199 passengers on board the plane died in the crash.

In December 2005, a U.S.-made C-130 crashed into a building near Tehran's Mehrabad airport. And in November 2007, 36 members of the Revolutionary Guards were killed after another crash that occurred shortly after takeoff.

With files from The Associated Press