More than 250 rescuers had tried to battle through dense forest to reach what is thought to be the wreckage of the Trigana Air plane, which disappeared last during a short flight in Papua province.
The ATR 42-300 twin-turboprop plane was carrying 49 passengers and five crew on the journey from Papua's capital Jayapura to Oksibil, a remote settlement in the mountains to the south.
Also on the plane was 6.5 billion rupiah (USD 470,000) in cash, which were social assistance funds being transported for distribution to poor families, according to the head of the Jayapura post office. The cash was being carried by four post office officials in bags.
It is just the latest air accident in Indonesia, which has a poor aviation safety record and has suffered major disasters in recent months, including the crash of an AirAsia plane in December with the loss of 162 lives.
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A plane today spotted debris engulfed in smoke in the mountains near Oksibil and search teams, including soldiers and police, set off in the early hours to reach the site, which is at an altitude of 8,300 feet (2,500 metres).
Efforts to reach the location, about 15 kilometres from Oksibil, were called off for the day at 5:30 PM (1400 IST) and would resume tomorrow, he added.
A photo of the suspected site showed an area that appeared to be fire-blackened and scattered with debris in thick forest, and Soelistyo said he was "98 percent" certain it was the location of the crash.
He said the chance of any survivors was "very slim". All those on the plane were believed to be Indonesians.
Some shouted "We want confirmation!" and threw a table at a crisis centre set up by Trigana Air at Jayapura airport.
"My family and I have been gathered here for hours. We want to know the fate of my brother, Kepi Deal, who was on board the plane," Rifan Wea, one of about 100 relatives at the airport, told AFP.
"We want to know whether he is dead or alive."
Small aircraft are commonly used for transport in remote and mountainous Papua and bad weather has caused several accidents in recent years.