At least one person on the ground was injured, but the Russian-made plane missed several densely populated apartment blocks by a few hundred yards (meters). About 20 houses were damaged or destroyed though most were under construction and believed to be unoccupied, locals said.
The Sudan-bound plane crashed around 1:50 a.m., when many people in the upscale neighborhood of Pakistan's largest city were asleep. One of the plane's engines was on fire when it flew overhead, several witnesses said.
"I saw one of its wings was burning and there was a blast and the fire engulfed the aircraft very quickly," said Riaz Ahmed.
The plane exploded into flames, sending fire and smoke into the night sky and setting off loud explosions. Fire trucks sprayed foam onto the crash site and after two hours the blaze was extinguished, allowing rescuers to search through the destroyed buildings for bodies or survivors.
Hundreds of people came to see the spectacle and film it with their cell phones, hampering access for emergency workers.
Aviation authority spokesman Pervais George said the plane came down two minutes after take off from the city's international airport. He said the eight crew, all Russians, were dead.
Many people initially thought the blast was from a bomb, a regular event in militant-torn Pakistan.
"I was sleeping and the huge blast awoke me. I thought some suicide attack might have occurred and I run outside," said Rehan Hashmi.
Local doctor Abdul Razak said one person was being treated at a hospital with severe burns.
Most of the buildings damaged and razed in the upscale neighborhood of Karachi were under construction and either empty or occupied by the laborers building them, they said. The housing complex was reserved mostly for Naval officers and their families.
George said the plane was an Il-89, a multipurpose cargo plane that is often used for ferrying humanitarian aid to developing countries, as well as other large items.
The crash was the third in less than five months in Pakistan.
Earlier this month in Karachi, 21 people were killed when a small passenger plane crashed soon after take off.
In July, a passenger jet operated by Pakistan carrier Airblue crashed into hills overlooking the capital, Islamabad, during stormy weather, killing all 152 onboard.
