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"This is a dark day for the army and for the airforce," Swiss airforce chief Aldo Schellenberg told reporters near the crash site, according to the ATS news agency.
The Swiss military voiced pessimism about the fate of the two crew members on the F/A-18 fighter jet, which crashed at noon (1000 GMT) in the Lopper area near the village of Alpnachstad in the central canton of Obwalden.
"Pictures from the site lead us to fear the worst," army chief Andre Blattmann told the press conference.
The defence ministry stressed in a statement that "the cause of the crash, as well as what happened to the two crew members remains unclear for the time being."
An investigation had been launched into the accident.
According to a witness account on Blick.ch, two fighter jets had been flying in parallel when one crashed into a cliff overlooking the Alpnach lake.
Wednesday's accident came as the country is preparing to buy 22 Gripen JAS-39 fighters, made by Sweden's Saab.
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