The plane was set to land at Karaj's Payam Airport but the pilot mistook it for the adjacent Fath airfield, which is not suited to servicing cargo aircraft.
The plane was carrying meat from Bishkek in Kyrgyzstan when it crashed near the capital Tehran, army spokesman Amir Taghikhani told state television.
Iran's air force said in a statement that the fate of the crew, including their possible 'martyrdom, ' is under investigation.
Images carried by Iran's state-run media showed the burned-out tail of the plane sticking out, surrounding by charred homes.
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There are no Boeing 707 planes in commercial service but it is... Local media revealed more details of the crash, saying it happened after the crew had attempted to land at the wrong airport.
State TV said rescue teams had been sent to the area, between the airports of Fath and Payam. Iranian media reported seven bodies from the crash had already been recovered.
Fath airport is in Alborz province, just east of Tehran.
The cargo aircraft was transporting meat from the Kyrgyz capital, Bishkek. There was no immediate information on casualties. The air force does operate Boeing 707s.