Television footage showed crowds gathering around the smouldering 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.
The Defence Ministry did not provide a death toll but expressed condolences to the victims' families. The cause of the crash was unclear, and an investigation has been opened.
Earlier, the civil protection agency put the death toll at around 100 people, believed to be mostly military personnel, but it was later revised up to more than 250.
The secretary general of Algeria’s ruling FLN party, General Djamel, told private broadcaster Ennahar TV that the dead included 26 members of the Western Saharan Polisario independence movement.