Lagos, Jun 4 (Reuters): A passenger plane crashed into a densely populated part of Lagos, Nigeria's commercial hub, on Sunday, killing all 147 people on board, the airline said.

President Goodluck Jonathan declared three days of national mourning and ordered an investigation into the cause of the crash which jolted residents of Lagos' Agege suburb where most live in tin-roofed buildings along unpaved streets.

The McDonnell Douglas MD-83, operated by privately owned domestic carrier Dana Air, was coming into land on a flight from the capital Abuja when it hit the building, not far from Lagos's Murtala Muhammed Airport, at 2:44 p.m. (1344 GMT) and burst into flames, according to the airline.

Among the dead was the spokesman for the Nigeria National Petroleum Corporation, Levi Ajuonuma, according to a passenger list released by the airline. Ajuonuma was also de facto spokesman for the oil minister in OPEC member Nigeria, Africa's biggest crude producer.

Dana Air said it was still investigating what caused the crash.

Thousands of people crowded around a the smouldering remains of a two-story tin-roofed building into which the aircraft had plunged.

Police used truncheons to beat back the massed onlookers on the scene, trying to make a path for rescue services, but the crowd was so large that some ambulances, sirens wailing, were unable to get through.

"This crowd is crazy. The rescuers can't even get access," said Jimoh, a local motorbike taxi man who said he had felt a huge thud as the aircraft struck.

"PLUNGED INTO SORROW"
"We heard a huge explosion, and at first we thought it was a gas canister," said Timothy Akinyela, 50, a local newspaper reporter who was watching a soccer match on TV with friends in a nearby bar.

"Then there were some more explosions afterwards and everyone ran out. It was terrifying. There was confusion and shouting," he said, showing a video he had taken on his phone.

Smoke billowed from the windows and roof of the building that had somehow survived being completely demolished by the crash. Locals climbed on top of walls to try to look in. Bits of the twisted metal were scattered on the muddy ground.

"The President joins all Nigerians in mourning all those who lost their lives in the plane crash which has sadly plunged the nation into ... sorrow," a statement from Jonathan's office said.

"President Jonathan assures air travellers in the country that every possible effort will be made to ensure that the right lessons are learnt ... and that further measures will be put in place to boost aviation safety in the country."

Air crashes are not uncommon in Nigeria, Africa's second biggest economy, which has had a poor airliner safety record, although it has improved in the past few years.

Dana Air operates flights to cities around Nigeria out of Murtala Muhammed Airport.