President Luiz Inacio Lula da Silva, declaring three days of national mourning, said there was no sign of survivors.
The new Boeing 737-800 operated by Brazilian low-cost carrier Gol probably plunged into the ground nose first after it clipped a smaller executive jet, according to the the head of Brazil's airport authority Infraero.
If the death toll is confirmed, it will be the worst aviation accident in Brazil's history.
The two soldiers who parachuted into the area were clearing a landing area for helicopters.
Indian trackers were helping find a path through the dense jungle for relief teams.
"All rational logic shows there is a high probability that a collision occurred," said Infraero chief Brigadier Jose Carlos Pereira.
The small size of the wreckage area indicated that the chances of survivors among the 149 passengers and six crew members on board were slim.
"Imagine the velocity at which it hit the ground coming from an altitude of 36,000 feet (11,000 meters)," Pereira said. "It's very unlikely that there will be survivors."
Authorities lost radar contact with Gol flight 1907 on Friday afternoon during its flight from the principal Amazon city of Manaus to the capital Brasilia.
Search planes found the crash site in Mato Grosso state, about 1,000 Kilometres north-west of Brasilia, officials said.
Friends and relatives gathered on the patio of a hotel in Brasilia waiting for details.
"Gol ... would not say if there might be any survivors," Robson Barreto said as he waited for news on his 29-year-old nephew Rafael who was a passenger.
The same tale was played out in Manaus airport.
"The lack of information is absurd, it's breathtaking. We are desperate families, we have our brother there, father of four, 40 years old. This is heartbreaking," one unidentified relative of a passenger told local Brazilian TV.
Denise Abreu, director of civil aviation authority ANAC, said signs indicated there had been a mid-air collision with a smaller jet, which landed safely.
The aircraft manufacturer Embraer said one of its executive jets, a Legacy 600 owned and operated by a client, had been involved in a collision and made an emergency landing at Cachimbo air force base with five passengers on board. No injuries were reported.
The Gol plane had been received new from Boeing on September 12 and had only 234 flight hours, the company said.
Manaus is a base for tourism in the Amazon, the world's largest rain forest, and a headquarters for several environmental groups.
Gol has expanded rapidly since its founding in 2001 to become Brazil's No. 2 airline and to offer flights to neighboring countries.
With its orange and white colors and stylized casual uniforms based on US no-frills carriers, it is an instantly recognisable brand in Brazil and one of its most successful new businesses.
Until now, the worst air disaster in Brazilian history was the June 1982 crash of a Vasp flight which hit a mountain in the Aratanha range near Fortaleza in north-eastern Brazil, killing 137 people.