The interior minister said no survivors had been found as rescuers searched the site after the accident on Wednesday.
"Nobody survived," Rehman Malik told Express TV.
The accident occurred as the plane was attempting to land in bad weather.
The search operation was complicated as the plane had plummeted into a gorge between two densely wooded hills, more than an hour by foot from the nearest road.
There were initial reports of up to six passengers being found alive, but these reports later proved to be wrong.
Bodies recovered
All the bodies had been recovered from the site, according to the police.
"You find very few intact bodies. Basically, we are collecting body parts and putting them in bags," Bin Yameen, a senior police official, told Reuters.
Rain has interrupted the airlifting of the bodies, but alternative arrangements have been made to bring them down the hillside on ropes should the weather not improve.
Police said they were informed first of a loud explosion, then fire sweeping through the hills that dominate the Islamabad skyline, before confirmation that a passenger plane had crashed.
"When I came, I saw a big ball of smoke and fire everywhere with big pieces of aircraft rolling down the hill," Haji Taj Gul, a police officer, said.
Pervez George, a civil aviation official, said the plane was about to land at the Islamabad airport when it lost contact with the control tower.
The Airbus A-321 belonged to the private Airblue airline.
Heavy rain
Raheel Ahmed, a company spokesman, said: "Apparently the cause of the crash is bad weather, but we leave that to the investigators."
Al Jazeera's Kamal Hyder, reporting from Islamabad, said there had been heavy rain in the area in the morning when the plane crashed.
"Visibility was very poor... Questions are now pointing at why the airplane would try and land considering weather conditions were so bad," he said.
"What will be critical is finding the black box which will give the final moments of the cockpit conversation that will give better clues into what happened."
The army sent special troops to the area to help out along with helicopters.
The ED202 flight was headed from Karachi to Islamabad.
Yousuf Raza Gilani, the prime minister, and the cabinet "expressed grief and sorrow over the tragic incident" and offered prayers for passengers who were killed.
"The federal cabinet declared one day national mourning because of this tragic incident. The prime minister called off the cabinet meeting until next week in the wake of this tragic incident," Gilani's office said in a statement.
Pakistan-based Airblue started operations in 2004 and is flying to many cities in Pakistan as well as five destinations in the Middle East and the UK.
The only previous recorded accident for Airblue was a tailstrike in 2008 at Quetta airport by one of the airline's Airbus 321 jets.
There were no casualties in that incident and damage was minimal, according to the US-based Aviation Safety Network.
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