This photo provided by Nancy Johnson shows what authorities say is a hot-air balloon that was believed to have caught fire and crashed in Va. on May 9, 2014. Virginia State Police received calls of the crash shortly before 8 p.m., police spokeswoman Corinne Geller told a news conference. Geller said a pilot and two passengers were believed to be on board, and that police believe it was the gondola that caught fire. (AP Photo/Nancy Johnson) ORG XMIT: NYKS101(Photo11: Nancy Johnson/AP)

Searchers and rescue workers are scouring a rural area in central Virginia after a hot-air balloon believed to be carrying three people caught fire and crashed Friday night.

The balloon is believed to have been part of the Mid-Atlantic Balloon Festival, an event taking place at the Meadow Event Park in Caroline County, Va., but the incident took place several miles away from the park, said Greg Hicks, the park's vice president of communications.

Virginia State Police and the Federal Aviation Administration were investigating, Hicks said.

Virginia State Police spokeswoman Corrine Geller said at a press conference late Friday that three hot-air balloons took off from Meadow Event Park Friday evening and headed northeast to a pre-approved landing zone about two miles away from the park. Two of the balloons landed safely. But as the third balloon attempted to land, witnesses said it struck a power line and burst into flames shortly before 8 p.m. ET near the Caroline Pines subdivision.

Based on witness accounts, including information from the other two balloon pilots at the scene, the basket -- or gondola -- of the doomed balloon caught fire and two explosions occurred, the second of which severed the gondola from the balloon, Gellar said.

Due to the fact that the balloon and gondola separated during the blaze, with the balloon ascending and the gondola descending, authorities were searching for two crash sites, Gellar said.

No wreckage has yet been found.

A pilot and two passengers were believed to be aboard, she said.

"We will continue through the night," Geller said. "We've got additional resources coming in until we find the wreckage."

Bad weather initially halted the air search, but it has since resumed. Virginia State Police, the Federal Aviation Administration, local law enforcement and EMS personnel are combing the area.

Gellar said grid searches are being conducted, but are hampered by darkness, dense forest and rough terrain. She also said police "have an idea (of the identities of the missing) and have been reaching out to family members."

The Meadow Event Park is known for being the birthplace of thoroughbred race horse Secretariat.

The Mid-Atlantic Balloon Festival was scheduled to take place at the park Saturday and Sunday. According to the park's website, a "Friday Flights Happy Hour" kicked off roughly two hours before the crash.

Balloon teams from across the country were expected to take part in the weekend event, but a statement posted Friday evening on the festival's website announced the festival had been canceled due to the accident and tickets would be refunded.