The death toll was expected to rise, with an unknown number of labourers feared killed when the Ilyushin IL-76, bound for the Sudanese capital Khartoum, slammed into buildings in the city.
"All eight people on board have died, we fear that some labourers on the ground have also been killed," CAA spokesman said. "We do not know the exact number of those killed on ground," he added.
Bodies of three labourers working on the construction site have also been recovered from the debris taking the toll to eleven, rescue authorities said.
Authorities said they had brought the fire under control but rescue workers were still searching for bodies.
"Recovered bodies are badly mutilated and beyond recognition," he said.
The plane slammed into buildings under construction in the Dalmia neighbourhood.
"Rescue workers are still searching whether there are any other bodies or injured people in the debris," a police official said.
It was the third plane accident in four months in Pakistan, a country of 170 million people where inter-city travel is most efficient by air, and the second aircraft to crash after take off from Karachi in just four weeks.
The CAA spokesman said that the jet took off from Karachi at 1:45 am (20:45 GMT Saturday) and crashed just one and a half minutes later.
Witnesses spoke of their horror at seeing a fireball racing through the night sky.
"I saw a fireball plummeting to ground," a milk seller said. He had been going home on his motorbike after closing his shop.
"It was so huge and quick. I was terrified."
"I couldn't see what it was. I sped up to save my life and after a few seconds I heard a deafening explosion, but thanks to Allah my life was saved and I was not injured."
The crash sparked fires in four or five construction sites, but officials said the number of casualties would have been far higher if the plane had struck nearby residential buildings.
Residents in nearby buildings spent the night with relatives, he added.
August 6, 1970: A PIA Fokker F27 turboprop aircraft crashes while attempting to take off from Islamabad in a thunderstorm, killing all 30 people on board.
December 8, 1972: A PIA Fokker F27 crashes in Rawalpindi, near Islamabad. All 26 people on board are killed.
November 26, 1979: A PIA Boeing 707 bringing home Pakistani Hajj pilgrims from Saudi Arabia crashes shortly after take-off from Jeddah airport, killing 156 people.
October 23, 1986: A PIA Fokker F27 crashes while coming in to land in the northwestern city of Peshawar, killing 13 of the 54 people on board.
August 17, 1988: A US-made Hercules C-130 military aircraft crashes near Pakistan's eastern city of Bahawalpur, killing military ruler General Mohammad Zia ul Haq and 30 others including Pakistani generals and the US ambassador.
August 25, 1989: A PIA Fokker carrying 54 people disappears after leaving Gilgit in northern Pakistan. The wreckage is never found.
September 28, 1992: A PIA Airbus A300 crashes into a cloud-covered hillside on approach to the Nepalese capital Kathmandu after the plane descended too early, killing 167 people.
February 19, 2003: An air force Fokker F27 crashes in fog-shrouded mountains near the northwestern city of Kohat, killing air force chief Air Chief Marshal Mushaf Ali, his wife and 15 others.
February 24, 2003: A chartered Cessna 402-B carrying Afghan Mines and Industries Minister Juma Mohammad Mohammadi, four Afghan officials, a Chinese mining executive and two Pakistani crew crashes into the Arabian Sea near the southern city of Karachi.
July 10, 2006: A PIA Fokker F27 bound for Lahore crashes into a field and bursts into flames shortly after takeoff from the central city of Multan, killing 41 passengers and four crew.
July 28, 2010: An Airblue Airbus 321 flying from Karachi crashes into hills outside Islamabad while preparing to land, killing everyone on board. Civil aviation authorities say 152 people were on board while police put the number at 149. November 5, 2010: A charter plane of a private organization was crashed in the area of Gulistan-e-Johar in Karachi, killing all 21 people on board.
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