Algerian state radio says that more than 100 people were killed in a military plane crash southwest of the capital.
Deputy Defence Minister General Ahmed Gaid Salah visited the site and ordered an investigation, the defence ministry said. It was scheduled to make a layover in Tindouf in southern Algeria, home to many refugees from the neighbouring Western Sahara, a disputed territory annexed by Morocco.
The dead include the plane's 10 crew and 247 passengers, a lot of them members of the armed forces, the ministry said in a statement.
The Soviet-designed II-76 military plane came down on an area with no residents, Achour added.
According to a military source quoted by Agence France Presse (AFP), the aircraft involved was "a Russian-built Ilyushin Il-76, capable of carrying about 120 passengers".
Algeria's longtime leader, President Abdelaziz Bouteflika, issued a statement offering his condolences.
The plane was reportedly heading to Bechar, in the southwest of the country near the border with Morocco.
Footage from the scene showed thick smoke being emitted from the wreckage.
Wednesday's plane crash is the deadliest in the world since July 2014, when all 298 people on board Malaysian Airlines flight MH17 died when it was shot down over eastern Ukraine.
Algeria has experienced a number of military and civil air disasters in recent years.
One young man cried as he spoke to a local TV station about a relative who died in the crash.
Most of the people on the plane were military personnel.
Earlier it was reported that 200 people had been killed in the incident.
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