AFP

The white jet grew closer, buzzing the top of a building and chopping a coconut tree as it descended, before finally smashing into a compound and causing the neighbourhood to erupt with a violent shake.

"We saw the plane just coming toward us like this," said Emeka Okafor, a 41-year-old father of two who lived on the middle floor of a two-storey residential building badly damaged in the crash.

"Blaaaaw! Like a bomb," Okafor said. "Fire immediately."

The crash on Sunday afternoon of a Dana Air MD83 passenger plane on the northern outskirts of Nigeria's largest city of Lagos killed at least 159 people, making it one of the worst air disasters in a country that has had more than its share.

Nigeria has grounded domestic airline Dana while an investigation continues, with questions swirling over what caused the crash of the 22-year-old plane.

The country's civil aviation chief has said the flight reported both of its engines having failed before crashing.

Residents of the neighbourhood where it plunged described a surreal set of events in the city of around 15 million, with some saying they had no idea what had hit, but knew they had to run, seeing flames, smoke and destruction as they did.

The plane with 153 people on board ploughed into a church, a house, a textbook warehouse and a two-storey apartment block that was home to 40 people, including Okafor, who made it out with his family.

Six people from the now demolished apartment block - four residents and two visitors - have so far been confirmed dead.

Some in the neighbourhood speculated that the pilot may have been aiming for a small, overgrown lot just beyond the chopped coconut tree and across from where he crashed. They wondered if he hoped crash-landing there would save lives.

The crash happened as Nigeria's national football team was set to play a World Cup qualifying match against Namibia in the southeastern city of Calabar, and many residents were readying to watch it on television.

Chinyere Peace Eweh, a 37-year-old mother of three, lived on the top floor of the building, but was at Bible study with her children and husband at the time of the crash. A friend called her to say that her flat was on fire.

"This is the only thing I have - and my Bible," she said, pointing to her clothes.

As residents were still trying to piece together what happened, chaos broke out at the crash site as thousands rushed into the area.

Some helped by directing fire hoses into the site, with masses of arms holding the lines above their heads, but others simply added to the confusion, while some even looted.

Authorities responded with whips to clear the crowd and rocks flew through the air. A helicopter tried to land and provoked pandemonium, while rescue workers faced difficulties accessing the scene.

By Tuesday, at least 150 bodies had been recovered, including a woman clutching her daughter.

Many of the human remains were unrecognisable, and rescue officials say DNA testing will be used with the help of international partners.