According to initial reports, the plane was a Boeing 213 and belonged to Bhoja Airlines.
The plane took off from Karachi at 5:00pm and was supposed to land in Islamabad at 6:40pm but crashed just before touchdown, according to a Pak TV channel's news report.
Witnesses say that flames could be seen rising from the crash site and the fire has reportedly engulfed several buildings.
Army troops have also been moved to the area where the plane crashed.
Plane was supposed to fly over Jinnah Garden to approach its destination and land at the airport.
The crash site has been cordoned off by Koral police.
Sources say that the plane crashed in a residential area in Jinnah Garden, but it has not been confirmed.
All rescue vehicles of Islamabad and Rawalpindi have been rushed to the spot including fire tenders, but traffic jam near the crash site is hampering rescue vehicles from reaching the site.
CAA authorities have refrained from giving out any official statement.
This was the first flight of Bhoja Airlines after the service started.
It is currently raining in Rawalpindi and it being suggested that the bad weather could have been the cause of the plane crash.
According to authorities, the plane crashed 10km away from the runway of Islamabad airport, near Chaklala airbase.
Rescue officials from Islamabad and Rawalpindi, as well as the Civil Aviation Authority, have left for the crash site.