Russia has said that five nuclear agency workers were killed Thursday by a blast during testing of a nuclear-powered missile at an Arctic facility.

The closed city of Sarov in the Nizhny Novgorod region, about 500 kilometres (300 miles) east of Moscow, declared 24 hours of mourning from 1:00 pm (1000 GMT) Sunday, with flags lowered and entertainment events cancelled, RIA Novosti state news agency reported.

The decree identified the five victims as staff of the Russian Federal Nuclear Centre.

The centre's chief said that the Rosatom nuclear agency had asked President Vladimir Putin's administration for those who died to be awarded posthumous medals.

"They are heroes of modern Russia and we will remember them," chief Valentin Kostyukov said in a video statement posted by Sarov media.

Rosatom said memorial services would be held on Monday.

During the Cold War, Sarov was a top-secret city known as Arzamas-16. The centre produced the Soviet Union's first nuclear weapons.

It is still a closed city accessible only with special passes.

Rosatom said the accident occurred while a missile was being tested on an offshore platform in the far northern Arkhangelsk region.

Fuel exploded and the blast blew staff into the sea, it said.

Russia's military initially said two people had been killed in the accident and it was not known whether they were among the five that Rosatom reported.

The nearby city of Severodvinsk recorded elevated radiation levels following the accident and panicked residents rushed to buy iodine to counteract radiation.

Alexander Chernyshov, deputy head of research at the Sarov nuclear centre, said in a video statement Sunday that researchers had checked levels in Severodvinsk and confirmed a brief spike.

"The radiation background level was exceeded twofold and lasted no more than an hour," he said.

"Neither our experts nor outside experts have recorded any remaining radioactive contamination," Chernyshov added.

Professor Jeffrey Lewis of the Middlebury Institute of International Studies said his "working hypothesis" was that the blast was related to the 9M730 Burevestnik nuclear-powered cruise missile, known by NATO as SSC-X-9 Skyfall.

In February, Putin said that tests on the Burevestnik were going successfully.

A state commission is investigating the accident.