Russian investigators on Monday sifted through the wreckage of an Aeroflot jet that crashed in the Ural mountains killing all 88 people on board, as the region marked a day of mourning, according to AFP.

The Boeing-737 plane plunged out of the sky on Sunday as it was coming in to land in the city of Perm, narrowly missing densely-populated residential areas. Witnesses said the plane was already on fire or exploded before the crash.

The Kommersant daily called the crash "one of this country`s most mysterious air disasters," quoting the chief air traffic controller as saying that the pilot was behaving "abnormally" and was not following basic instructions.

The plane ascended instead of descending for landing on its second approach and turned left instead of bearing right. But when asked, the pilot told the controller, Irek Bikbov, that everything was fine, Kommersant reported.

"We are looking at various possible explanations for the accident. Currently the main one is that it was a technical fault," Vladimir Markin, an investigator from the Russian prosecutor`s office, told Interfax news agency.

Transport Minister Igor Levitin earlier excluded any possibility of a terrorist attack, while chief investigator Alexander Bastrykin was quoted as saying that there may have been a fire in one of the engines.

Some 300 rescue workers and investigators were working at the scene of the accident on Monday, while flags were lowered and television entertainment shows were cancelled across Perm region to mark a day of mourning for the victims.

Jewish, Muslim and Orthodox memorial services were to be held in the city.

"Another black day has appeared in the history of Russia," said the tabloid Tvoi Den, which also reported that President Dmitry Medvedev had cancelled his 43rd birthday celebrations on Monday because of the tragedy.

In a bid to stave off further reputational damage, Aeroflot chief executive Valery Okulov said earlier that the Aeroflot Nord airline to which the plane belonged would have its name changed, Echo of Moscow radio reported on Monday.

The firm flies to 26 cities in Russia and is 51-percent owned by Aeroflot.

The airline earlier confirmed there were no survivors and said the dead included nine people from Azerbaijan, five from Ukraine and one each from France, Germany, Italy, Latvia, Switzerland, Turkey and the United States.

Among the victims was General Gennady Troshev, a former top commander of Russia`s war in Chechnya and advisor to ex-president Vladimir Putin.

The airline set up a crisis centre at Moscow`s Sheremetyevo airport and in Perm for relatives of the victims and pledged compensation of up to two million rubles (some 80,000 dollars or 55,000 euros) for each person lost.

It was the worst air disaster involving a Russian airliner since a Tupolev-154 flying to Saint Petersburg went down near the Ukrainian city of Donetsk in August 2006, killing all 170 passengers on board.

The crash will doubtless raise renewed concerns about the safety of air travel in Russia where experts have pointed to major faults in the training of crews as well as Russia`s ageing fleet of passenger jets.

Russian regional jets are on average 30 years old, official data showed.