Crans-Montana, Switzelrand - Dozens were killed and over 100 injured when a fire ripped through a crowded bar in the luxury Swiss ski resort town of Crans-Montana early Thursday as young party-goers rang in the New Year.

Horrified bystanders described "panic" as people tried to break the windows of the bar to escape, and others, covered in burns, poured into the street.

Police, firefighters, and rescuers rushed to the popular resort, which is set to host the Ski World Cup from January 30, after the fire broke out in the early hours of New Year's Day.

Frederic Gisler, police commander in the Wallis canton in southwestern Switzerland, told reporters that authorities had counted "around 40 people who have died and around 115 injured, most of them seriously."

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Gian Lorenzo Cornado, Italy's ambassador to Switzerland, later told AFP in Wallis that the death toll had risen to 47, but Swiss police said they could not confirm a specific number.

This was "one of the worst tragedies that our country has experienced", Guy Parmelin, who took over the Swiss presidency on Thursday, told reporters.

"It constitutes a calamity of unprecedented, terrifying proportions," he said, announcing that flags would be flown at half-mast for five days.

Thursday evening, around 400 people gathered for a church service in Crans-Montana to honor the victims, and later hundreds more gathered silently in the icy night to lay flowers and light candles near the site of the tragedy.

"There are dead and injured, and we have someone close to us who is still missing. We have no news of them," one of the women, who did not want to be identified, told AFP before laying down a bouquet.

A tourist from New York, who filmed bright orange flames pouring from the bar, told AFP he saw people running and screaming.

Alexis Lagger, an 18-year-old, had been walking with a group of friends past Le Constellation bar – a spot popular with young people and tourists – when they noticed smoke and flames emerging from the venue and called the police.

"People were running through the flames. People were using chairs to try to break the windows," he told Swiss public broadcaster RTS.

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Authorities said they were still investigating the causes of the fire, which erupted shortly before 1:30 AM local time, but said they did not believe it had been triggered by an "attack."

Several witness accounts, broadcast by various media, seemed to point to sparklers mounted on top of champagne bottles and held aloft by restaurant staff as part of a regular show put on for patrons.

There were "waitresses with champagne bottles and little sparklers. They got too close to the ceiling, and suddenly it all caught fire," Axel, a witness present at the time of the incident, told the Italian media outlet Local Team.

The emergency units at Wallis hospitals quickly filled up, and many of the injured were transported across Switzerland and neighboring countries.

More than 30 victims were taken to hospitals with specialized burns units in Zurich and Lausanne, and six were taken to Geneva, Switzerland's Keystone-ATS news agency reported.

The European Union said it has been in contact with Swiss authorities about providing medical assistance, while French President Emmanuel Macron said some of the injured were already being cared for in French hospitals.

Swiss authorities said they were racing to identify the victims, but warned the process "could take several days, even weeks."

"Given the international nature of the Crans resort, we can expect foreign nationals to be among the victims," Gisler said.