Pakistan President Asif Ali Zardari and Prime Minister Yousuf Raza Gilani expressed deep sorrow over the tragedy and ordered investigation into the incident, Geo News reported.
The Pakistan Civil Aviation Authority (CAA) said the crash was apparently due to bad weather.
Eyewitnesses said the plane was already ablaze when it was descending.
According to reports, the plane was was struck by lightning, as heavy rain, accompanied by thunder storm and hail was lashing the capital at the time of the crash, which occurred about 6.40 p.m.
The airplane's flight data recorder (Black Box) was recovered.
According to rescuers, the wreckage area - around one sq km - was scattered with mangled bodies, severed body parts, burnt luggage, shoes, jewellery and parts of the fuselage strewn all over.
Saifur Rehman, from a police rescue team, said the plane came down in Hussain Abad village, two miles from the main Islamabad highway.
Sources in the CAA said the flight was given clearance to land at Islamabad's Benazir Bhutto International Airport but it lost contact with the control tower minutes before the crash.
"Fire erupted after the crash. The wreckage was on fire, the plane is completely destroyed. We came with teams of firefighters and searchlights and more rescuers are coming," Rehman told Geo television.
The plane fell on top of houses in the village toppling building before hitting the ground, said eyewitnesses, but there were no reports of people in the village dying.
Of the 110 bodies recovered, 50 have been sent to the Pakistan Institute of Medical Sciences (PIMS) and the remaining bodies sent to two other hospitals in Islamabad, where grieving relatives and authorities were trying to identify the bodies.
According to Samaa TV, Bhoja Air and PIA have announced to take at least one relative of each crash victim from Karachi to Islamabad on special flights.
Bhoja Airlines had reportedly bought over 27-year-old aircraft from Shaheen Airlines after it was scrapped by the latter for its compromised flight-worthiness, Geo News said.
Bhoja Airline officials have not commented.
Geo News said that Bhoja Air relaunched its domestic operations with a fleet of five 737s in March and was planning to start flights connecting Karachi, Sukkur, Multan, Lahore and Islamabad.
Bhoja was grounded in 2000 by the Civil Aviation Authorities amid financial difficulties, it said quoting newspaper reports.
The worst aviation tragedy on Pakistani soil came in July 2010 when an Airbus 321 passenger jet operated by the private airline Airblue crashed into hills overlooking Islamabad while coming in to land after a flight from Karachi.
All 152 people on board were killed in the accident, which occurred amid heavy rain and poor visibility.