The statement was the first confirmation that the agency was involved in the incident, which briefly drove radiation levels up to 20 times their normal levels in the nearby city of Severodvinsk.
The explosion of a secretive isotope-powered missile engine was so powerful that it blew the device into pieces and threw workers off a sea platform, Russian nuclear agency Rosatom said. "The search continued until there was no hope left (that) survivors will be found", it said, according to Tass.
"The tragedy occurred during the period of work related to the engineering and technical support of isotopic power sources in the liquid-propellant system", it said. The Defence Ministry has said back then that two people were killed in the accident.
However, city officials later deleted the statement online, saying they did so "because this incident comes under the authority of the defense ministry".
The ministry statement came after officials in the city of Severodvinsk, roughly 30 kilometers (19 miles) away from the test site, said on their website that automatic radiation detectors in the city "recorded a brief rise in radiation levels" around noon on Thursday.
USA -based nuclear experts said they suspected the explosion occurred during the testing of a nuclear-powered cruise missile vaunted by President Vladimir Putin a year ago.
US Ambassador to Russia Huntsman Steps Down From His Post
Huntsman was governor of Utah from 2005 and 2009 and is rumored to be considering a run for the position. Russian Federation has also maintained close ties with major USA rivals, such as Iran and China.
He said this exceeded the permitted limit of 0.6 microsieverts, TASS reported.
Greenpeace Russia published a letter from officials at a Moscow nuclear research center who gave the same figure, but said higher radiation levels lasted for an hour. The officials said this did not present any significant risk to public health. They were receiving the necessary medical treatment in specialised facilities, it said. An expert from Moscow's Institute for Nuclear Research, Boris Zhuikov, told RBK independent news site that isotope power sources are mainly used in spacecraft and are not usually risky for people working with them. The Russian military has, meanwhile, refuted a report that a Rosatom vessel, capable of collecting radioactive waste, was dispatched to Severodvinsk, saying it had actually been undergoing scheduled trials.
There were no further details of the rocket or fuel type.
Local media has also reported that local residents have been stocking up on iodine, which helps to reduce the effects of radiation exposure.
"People started to panic".
There was a rush on iodine stocks during the 1986 Chernobyl nuclear disaster in Ukraine, which sent a huge plume of radiation across Europe.