It had been flying from the capital Jakarta to West Java.
Three foreigners, from Britain, India and Singapore, were among the six civilians on board the plane when it took off on a short flight to test ground imaging equipment.
The other 12 people on board the plane were from the military.
Soldiers were on their way to the crash site but were not expected to reach the wreck for several hours.
Gusti Made Oka, an Indonesian air force deputy chief, told local radio that bodies had been seen at the crash site.
"The residents saw bodies scattered around the wreckage, and a severed leg. The plane was completely smashed," he said.
"Our team is heading to the location to evacuate the bodies. We have to move quickly so that we can help any survivors."
Hadi Tugiman, a rescue co-ordinator, said rescue efforts are being hampered by difficult conditions.
"The jungle is quite thick and the weather is so foggy that it's making the search difficult," he told the AFP news agency.
Air force spokesman Ray said the plane was testing digital mapping equipment when it disappeared.
The foreigners reportedly work for Credent Technology, a satellite imaging company.
Indonesia has one of the world's worst aviation safety records following a string of deadly disasters in recent years.
The archipelago relies heavily on air as well as sea links.