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Dozens of firefighters are feared trapped under the rubble after Iran's oldest high-rise collapsed live on TV on Thursday following a fire.

Authorities told the state-run IRNA news agency that 200 firefighters had been called to the scene at the iconic 15-storey Plasco building in central Tehran, just north of the capital's sprawling bazaar.

Many had already been hurt before it came down, and initial figures said between 30 and 40 firefighters had been injured and seven hospitalised.

The building, dating from the early 1960s and including a shopping centre and clothing workshops, had been evacuated after the fire broke out early on Thursday.

But state television said "tens" of firefighters may have been inside when it collapsed.

Dramatic images showed flames pouring out of the top floors before it crumbled to the ground.

The fire is thought to have begun on the ninth floor and spread quickly to workshops above.

A side of the building came down first, tumbling perilously close to a firefighter perched on a ladder and spraying water on the blaze.

"The building's caretaker and some firefighters were inside when the building collapsed," said Ahmad, a shop owner in the building.

"I've lost my entire stock. Thousands of families have been ruined," he added.

The steel skeleton of the building could be seen bending down to the ground as around 100 fire engines and dozens of ambulances surrounded the area.

"A friend of mine has a shop there. I keep calling him but there's no answer. I think he's been trapped," said Mohsen, an onlooker.

Police evacuated the area around the building, fearing secondary explosions caused by gas leaks, and worked to clear crowds that were blocking access for rescue services.

"There a number of people inside but we don't know how many and the fire brigade organisation is going to announce how many were there," Tehran police chief Hossein Sajedinia told AFP.

"Even one would be too many," he added. 

Fire brigade spokesperson Jalal Maleki said the building was known to breach safety standards.

"We had repeatedly warned the building managers about the lack of safety of the building," he said, adding that it lacked fire extinguishers.

"Even in the stairwells, a lot of clothing is stored and this is against safety standards. The managers didn't pay attention to the warnings."

The Plasco building was the first high-rise and shopping centre in Tehran and was the city's tallest building when it was finished in 1962, before being dwarfed by the construction boom of later years. 

It was built by Habibollah Elghanian, a prominent Iranian-Jewish businessman who was arrested for ties to Israel and executed after the 1979 Islamic revolution that brought the current ruling system to power - a move that prompted many members of the country's longstanding Jewish community to flee.