"Military radar surveillance has been increased and F16 planes are ready for take-off," tabloid daily Correio da Manha reported Thursday.
It said the Portuguese civil protection service had received scores of calls from people who reported briefly seeing a silent, luminous object in the sky on Tuesday night, giving off white smoke.
Air force spokesman Colonel Carlos Barbosa confirmed to Lusa news agency that military radars had detected "a target... that was not identified as a plane" for two or three minutes.
The national air traffic control authority, Navegacao Aerea de Portugal (NAV), also confirmed a UFO had been spotted in the north and south of the country just before midnight on Tuesday.
"The control tower in Oporto (north) detected a flying object which had been observed 25 minutes earlier in Montijo and Beja (south)," NAV spokesman Paulo Lagarto said.
The authorities were unable to say what the mysterious object was.
But Jose Fernando Monteiro, a geology researcher at Lisbon's science university, said he had consulted US air defence officials and the UFO could not have been a meteorite.
If it had been a meteorite it would have travelled much faster and made a lot of noise, Monteiro told Correio da Manha and Lusa.
The European Space Agency said the UFO was not a falling satellite either and the Portuguese weather service said there was no meteorological explanation for the phenomenon.
The only person to come up with a possible explanation was astronomist Jose Matos, who said the UFO might have been an Iridium telecommunications satellite.
"These satellites orbit at a height of about 780 kilometres (490 miles). They each have three antennae, which are polished like mirrors and reflect the light of the sun," he told the media.