A Russian plane from Tel Aviv carrying up to 78 people, most of them Israelis, exploded and crashed into the Black Sea off Russia.
Israeli authorities suspended all flights from Tel Aviv's Ben Gurion airport, where security is the tightest in the world, but allowed incoming planes to land.
The three-engine TU-154 belonging to Sibir airlines - bound from Ben Gurion airport to the Siberian city of Novosibirsk - had 66 passengers and up to 11 crew on board. It is believed it exploded before plunging into the 1,000 metre-deep sea.
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Vladimir Putin
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Mr Putin told a meeting of European justice ministers at the Kremlin: "Today a tragic event has happened to us . . . a civilian aircraft crashed today, and terrorism has not been excluded as the cause".
The aircraft crashed into the Black Sea some 185 kilometres off Russia early this afternoon. Israel suspended all flights leaving the country following the incident.
Israel is not ruling out "a terrorist act" in the crash, a transport ministry official said. "For the time being we are collecting information but we are not excluding any lead, including a terrorist act," said the spokesman.
NTV television quoted Israeli airport officials as saying that all passengers on board were Israeli citizens. But Israeli television said there were 66 passengers, of whom 51 were Israelis.
Israeli radio said the aircraft had stopped over in Bulgaria, but authorities there said it had not even entered their airspace.
Israeli Transport Minister Mr Ephraim Sneh set up a crisis cell to deal with the situation, ministry officials said.