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Television footage showed crowds gathering around the smoking and flaming wreckage near Boufarik airport southwest of Algiers. A line of white body bags could be seen on the ground next to what media said was a Russian Ilyushin transport plane.
A total of 257 people died in the crash, state TV reported.
A member of Algeria’s ruling FLN party told the private Ennahar TV station the dead included 26 members of Polisario, an Algerian-backed group fighting for the independence of neighbouring Western Sahara – a territory also claimed by Morocco in a long-running dispute.
The plane was heading to Tindouf, an area on Algeria’s border with Western Sahara, but crashed on the airport’s perimeter, Algeria’s defence ministry said.
Tindouf is home to thousands of refugees from the Western Sahara standoff, many of them Polisario supporters.
UN attempts to broker a settlement have failed for years in the vast desert area, which has contested since 1975 when Spanish colonial powers left. Morocco claimed the territory while Polisario established its self-declared Sahrawi Arab Democratic Republic there.
Algeria’s defence ministry issued a statement expressing condolences to families of the victims.
In February 2014, an Algerian Air Force Lockheed C-130 Hercules crashed in a mountainous area in eastern Algeria killing 77 passengers and leaving one survivor.