The Aseman Airlines plane, en route from Tehran to the south-western city of Yasuj, came down near the city of Semirom in Isfahan province.
The Red Crescent deployed search and rescue teams to the site. The airline retracted a statement saying definitively that all aboard were dead.
Flight EP3704 left Tehran at 04:30 GMT, and crashed about an hour later.
The aircraft came down on Dena Mountain, 22km (14 miles) from Yasuj, news channel Irinn reported.
The plane was a French-Italian-made twin-engine turboprop ATR 72-500.
Sixty passengers, two security guards, two flight attendants and the pilot and co-pilot were on board.
The airline initially said everyone had been killed, but said later: “Given the special circumstances of the region, we still have no access to the spot of the crash and therefore we cannot accurately and definitely confirm the death of all passengers of this plane.”
Bad weather had hampered rescue efforts. Emergency teams had to travel to the crash site by land rather than using a helicopter.
Iran has suffered several aviation accidents in recent years and has an ageing aircraft fleet.
The country has struggled to obtain spare parts to maintain its planes in the face of international sanctions imposed to curb its nuclear programme.
Those sanctions have been mostly lifted under a 2015 deal between Iran and the US alongside several other powers.
Aseman, Iran’s third largest airline, signed a contract with Boeing last year to buy 30 of its latest medium-range 737s.