Dozens of people are feared to have been killed and around 100 others injured after an explosion tore through a crowded bar during a New Year's Eve party in the upscale ski resort of Crans-Montana in southwestern Switzerland, Swiss police said on Thursday.

Police had earlier said many people were being treated for burns.

More than 100 people were in the bar at the time of the explosion, a police spokesperson said.

The fire broke out at 1.30 a.m. (0030 GMT) in a bar called 'Le Constellation' in Crans-Montana, where police, the fire brigade and rescue services were deployed to help victims.

The area has been completely closed off, and a no-fly zone has been imposed over Crans-Montana, police said in a statement, adding that the cause of the blast remained unclear.

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

"Several people lost their lives and others were injured," a police statement said.

"A large contingent of police, firefighters, and rescue workers immediately went to the scene to assist the numerous victims," it said.

"The operation is still ongoing."

Ambulances were still parked outside the bar hours later, and broken windows could be seen. Local media described a "smell of burning still in the air".

Swiss daily Blick cited a doctor at the scene suggesting that the death toll could be in the "dozens". 

Regional daily Le Nouvelliste also said its sources were describing "a heavy toll", with "around 40 dead and 100 injured".