The C-130 transport plane crashed on Tuesday into a residential area killing many passengers and people on the ground, state television and witnesses said.
Mojtaba Mirabdollahi, a spokesman for the Interior Ministry, put the death toll at 116.
A government official estimated the apartment block housed about 250 people. An interior ministry spokesman said he could confirm six to 10 deaths among those on the ground.
A police spokesman told state radio all passengers and crew on board the C-130 transport were killed when it hit the building in densely populated southern Tehran.
It said the plane went down next to a high-rise housing block and household gas supply station.
The plane, which belonged to the Iranian air force, was bound for the southern port of Bandar Abbas and many of the passengers were local journalists covering military exercises in the Gulf.
The pilot had reported engine trouble and requested an emergency landing at Tehran's Mehrabad international airport, but crashed just short of the runway, police said.
A military C-130 plane similar to
the one that crashed
Iranian media quoted witnesses as saying one of the plane's wings was on fire as it came down.
Reuters witnesses said the nose of the crashed aircraft had been completely destroyed while its fuselage was blackened by smoke. Flames licked out of the windows of the flats and thick black smoke billowed into the sky.
Schools were closed because of high smog levels, raising fears that more children than usual would have been at home when the plane crashed just after 2pm (1040 GMT). A policeman said he saw the burned corpses of several children.
Another policeman said: "Some people were throwing themselves out of windows to escape the flames. I saw two die like that."
Witnesses told IRNA the whole building seemed to be ablaze.
"It is awful down here. I am suffocating," Red Crescent official Shahram Alamdari told Reuters by telephone from the scene, before hanging up.
The district is inhabited by members of the military and
"It is awful down here. I am suffocating"
Red Crescent official
their families, and lies on the flightpath to Mehrabad airport.
Passerby Hassan Hedayati, his face covered in dust and hands caked with dried blood, said he was among the first on the scene.
"I pulled 30 bodies out of the plane. They were all charred," he said.
Scuffles broke out as police cordoned off the area, trying to keep back hundreds of anxious residents trying to push past.
Emergency services were using helicopters, ambulances and buses to evacuate the dead and wounded. Bulldozers also arrived at the scene.
Iran has a poor airline safety record following a string of air disasters in the past 30 years although most have involved Russian-made aircraft.
US sanctions have prevented Iran from buying new aircraft or spares from the West, forcing it to supplement its fleet of Boeing and Airbus planes with aircraft from former Soviet Union countries.
Iranian fire brigade workers at
the scene of the aeroplane crash
The C-130 Hercules aircraft, manufactured in the United States, are used in more than 60 nations for dropping paratroopers and supplies into war zones.
In Iran's last major military air disaster, an Iranian Ilyushin-76 troop carrier crashed in the southeast of the country on 19 February 2003, killing all 276 Revolutionary Guard soldiers and crew aboard.