Jose Alencar, Brazil's vice president, confirmed the reports.
"A TAM airlines plane from Brazil supposedly saw something on fire in the Atlantic Ocean. This was an aeroplane that landed today," Alencar said on Monday.
But a French merchant ship conducting a search of the area where TAM reported seeing fire did not identify "any trace of the flight", the French military said on Tuesday.
Subsequent air force searches around the area have also "yielded nothing" so far, the military said.
The Air France jet, an Airbus A330-200, was carrying 228 people from at least 32 countries on its route from Rio de Janeiro to Paris when it is believed to have vanished in a severe thunderstorm on Monday.
Authorities said they are still trying to determine what caused the accident, but that they fear there is no chance of finding survivors.
Jean-Louis Borloo, the French environment minister, said officials did not believe the craft could have been brought down by something as simple as a bolt of lightning, which previous reports had suggested.
"There really had to be a succession of extraordinary events to be able to explain this situation," Borloo told RTL radio.
He added that "the race against the clock has begun" to find the plane's two black boxes, which emit signals for up to 30 days.
Search and rescue
|The Air France passenger jet, pictured here in January, was flying from Brazil to France [AFP]
Meanwhile, crews from both sides of the Atlantic have stepped up the hunt for the jet.
The Pentagon said on Monday it had dispatched a surveillance aircraft and a search and rescue team to help Brazilian and French aircraft.
France has also asked Washington to use its spy satellites and listening posts to help with the search.
A French military plane dispatched from Senegal, a west African country on the Atlantic seaboard, has also been searching the area.
Officials said the search was centred on an area more than 1,100km off the Brazilian coast and while search aircraft have managed to fly over the area, the first navy ships are not expected to arrive until Wednesday.
Air France said the 216 passengers from 32 countries comprised 126 men, 82 women, seven children and a baby. There were also 12 French crew members on board.
More than half of the passengers were either French or Brazilian.
Flight AF447 had encountered a severe thunderstorm before sending an automated message saying that its electrical system had failed at 02:14 GMT on Monday.
|The plane lost radio contact over the Atlantic while flying from Rio de Janeiro to Paris
Pierre-Henry Gourgeon, Air France's chief executive, said "several electrical systems had broken down".
"It is probable that it was shortly after these messages that the impact in the Atlantic came," he told reporters at Charles de Gaulle airport in Paris, where the flight had been due to land.
Nicolas Sarkozy, the French president, told relatives waiting for their loved ones at the airport that "the prospects of finding any survivors are very slim".
"It's a catastrophe the likes of which Air France has never seen," he added.
If confirmed that all 228 people on board are dead, it would be the worst loss of life in Air France's history and civil aviation's worst accident for more than a decade.