Nearly 300 people were killed when a runaway train loaded with fuel and chemicals derailed and exploded in northeastern Iran on Wednesday.

The government news agency said fire and rescue officials, along with the local governor, the mayor and the fire chief, were among the dead.

Five villages were destroyed and about 400 people were injured near the site of a train explosion outside the city of Neyshabur, about 650 kilometres east of Tehran.

Neyshabur, Iran. image from Iranian TV (AP photo)

The freight cars were waiting at the Abu Muslim train station near Neyshabur when "some vibrations" caused the trains to begin rolling around 4 a.m., said Mohammad Maqdouri, head of the local emergency operations headquarters.

The cause of the vibrations was not clear. Neyshabur is in a region prone to earthquakes.

Without an engine or anyone in control, the train picked up speed, finally overturning when it reached Khayyam, the next stop.

The train then caught fire. As firefighters tried to douse the blaze, the train exploded around 9:45 a.m., killing almost all the spectators, fire and rescue officials and residents of nearby villages.

The 51 freight train cars were hauling sulphur, fuel oil and industrial chemicals.