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The crisis at the Fukushima Daiichi site is now two levels below Ukraine's 1986 Chernobyl disaster.
The head of the UN's nuclear watchdog warned in Tokyo the battle to stabilise the plant was a race against time.
The crisis was prompted by last week's huge quake and tsunami, which has left at least 16,000 people dead or missing.
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The Japanese nuclear agency's decision to raise the alert level to five grades Fukushima's as an "accident with wider consequences".“Start Quote
People of the entire world should co-operate with Japan”End Quote Yukiya Amano UN nuclear watchdog
It also places the situation there on a par with 1979's Three Mile Island nuclear accident in the US.
Meanwhile, further heavy snowfall overnight all but ended hopes of rescuing anyone else from the rubble after the 9.0-magnitude quake and tsunami.
Millions of survivors have been left without water, electricity, fuel or enough food; hundreds of thousands more are homeless.
According to the latest figures, 6,405 people are dead and about 10,200 are missing.
On Friday, people across Japan observed a minute's silence at 1446 (0546 GMT), exactly one week after the disaster.
Panic-buying
As the country paused to remember, relief workers toiling in the ruins bowed their heads, while elderly survivors in evacuation centres wept.
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Richard Black Environment correspondent, BBC News Japan's upgrading of the Fukushima incident from severity four to five stems from concerns about the reactors in buildings 1, 2 and 3, rather than the cooling ponds storing spent fuel.
Level five is defined as an "accident with wider consequences". This was the level given to the 1957 reactor fire at Windscale in the UK and the partial meltdown of the Three Mile Island plant in the US in 1979.
Both met the level five definition of "limited release" of radioactive materials to the wider environment.
Windscale is believed to have caused about 200 cases of cancer, whereas reports into the Three Mile Island incident suggest there were no health impacts outside the site.
French and US officials had previously said the Fukushima situation was more serious than Japanese evaluations suggested.
Higher radiation levels than normal have been recorded in a few places 30km from the site, but in Tokyo, they were reported to be normal.
Despite official assurances that the radiation risk is virtually nil outside the 20-km (12-mile) exclusion zone around the plant, unease has spread overseas. Analysis
Richard Black Environment correspondent, BBC News Level five is defined as an "accident with wider consequences". This was the level given to the 1957 reactor fire at Windscale in the UK and the partial meltdown of the Three Mile Island plant in the US in 1979.
Both met the level five definition of "limited release" of radioactive materials to the wider environment.
Windscale is believed to have caused about 200 cases of cancer, whereas reports into the Three Mile Island incident suggest there were no health impacts outside the site.
French and US officials had previously said the Fukushima situation was more serious than Japanese evaluations suggested.
Higher radiation levels than normal have been recorded in a few places 30km from the site, but in Tokyo, they were reported to be normal.
Britain and the US are among countries which have organised aircraft to evacuate from Japan those of their citizens who are concerned.
Store shelves in parts of the US have been stripped of iodine pills, which can protect against radiation, while Asian airports have been scanning passengers from Japan for possible contamination.
Shoppers in China have been panic-buying salt in the mistaken belief that it can guard against radiation exposure.
Meanwhile, Prime Minister Naoto Kan told a national television address: "We will rebuild Japan from scratch. We must all share this resolve."
He said the natural disaster and nuclear crisis were a "great test for the Japanese people", but exhorted them all to persevere.
The head of the International Atomic Energy Agency, Yukiya Amano, arrived earlier in Tokyo and warned the Fukushima crisis was a "race against the clock".
"This is not something that just Japan should deal with, and people of the entire world should co-operate with Japan and the people in the disaster areas," said Mr Amano, a Japanese citizen.
He said he would not visit the Fukushima Daiichi site, which has been rocked by a series of explosions, on his current trip to the country.
His four-member team of nuclear experts would start by monitoring radiation in the capital, he said, before moving to the vicinity of the quake-hit facility.
Military fire trucks have been spraying the plant's overheating reactor units for a second day.
Water in at least one fuel pool - reactor 3 - is believed to be dangerously low, exposing the stored fuel rods.
If the ponds run dry, a nuclear chain reaction could release more radiation into the atmosphere.
An electricity line has been bulldozed through to the site and engineers are racing to connect it, but they are being hampered by radiation.
The plant's operators need the power cable to restart water pumps that pour cold water on the reactor units.
Military helicopters which dropped water from above on Thursday have been kept on standby.
Televised footage of the airdrops had shown much of the water blowing away in the wind.
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via bbc.co.uk
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