The Bhoja Air flight B-213 crashed less than 5 miles short of Benazir Bhutto International Airport in Islamabad, the Associated Press of Pakistan reported.
Prime Minister Syed Yousuf Raza Gilani expressed grief over the incident and called for an immediate relief and rescue operation.
The prime minister further ordered the Civil Aviation Authority to assist in the rescue efforts and to conduct an investigation of the crash.
All 127 people who were on the plane are believed to have died, the PakTribune reported.
Heavy rain and windstorms were reported in the area at the same time as the crash, an aviation official said, adding lightning might have caused the plane to catch fire.
Witnesses said many houses and other buildings were damaged during the crash.