TV said rescue teams had been sent to the area, between the airports of Fath and Payam.
The Boeing 707 reportedly hit a building while trying to land at Fath airport in Karaj, west of Tehran.
The big jet, operated by the Iranian Air Force, exploded into flames after crashing into houses near the capital of Tehran. It wasn't immediately clear who owns the plane, though Gen. Shahin Taghikhani, an army spokesman, told state TV that the plane and its crew were Iranian.
"Due to a mistake by the pilot, it came down at the Fath airport", Farsi News reported, citing Iranian officials.
The report says the crash occurred as the plane headed for the wrong airport as it made its approach for landing.
The plane's engines and wheels are spread across the crash site and images from inside the plane's hull show it is completely charred.
A spokesman for Iran's civil aviation said the plane belonged to Kyrgyzstan, while Kyrgyzstan's Manas airport said it was operated by Iran's Payam Air.
Iranians often use the word "martyrdom" for those who die in war or national service, suggesting the aircraft may have belonged to the air force.
The Iranian air force does operate Boeing 707s and it also has a civilian airline, SAHA.
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