The Falcon 1 rocket, a sleek black-and-white booster built to usher in an era of low-cost space travel, was bitten by failure for the third time in three tries during a dramatic Saturday night launch from the central Pacific.

Disaster struck about two-and-a-half minutes after a seemingly picture-perfect blastoff at 11:34 p.m. EDT Saturday (0334 GMT Sunday) from the rocket's launch site on Omelek Island at Kwajalein Atoll in the central Pacific Ocean.

"Unfortunately, a problem occurred with stage separation, causing the stages to be held together," said Elon Musk, SpaceX CEO and chief technical officer. "This is under investigation."

Stage separation was slated to occur two minutes and 39 seconds after liftoff as pyrotechnic bolts fired to sever the physical connections between the stages.

The bolts are all redundantly initiated and have never failed aboard other launch vehicles, according to SpaceX.

But officials stressed it was too early to draw any conclusions about a root cause of the failure.

SpaceX provided a live webcast of the launch, but the company abruptly cut a video feed from a downward-facing on-board rocket camera a few seconds prior to stage separation.

"We are hearing from the launch control center that there has been an anomaly on the vehicle," said Max Vozoff, a SpaceX mission manager providing expert commentary on the webcast.

The bitter failure was a "big disappointment," according to Musk.

Lost aboard the Falcon was the U.S. military's Trailblazer satellite, two small NASA payloads and a cache of cremated human remains, including the ashes of astronaut Gordon Cooper and Star Trek actor James Doohan.

The Falcon 1 booster pierced the speed of sound and endured the most crushing period of aerodynamic pressure about a minute after liftoff. Cheers erupted from a crowd of employees gathered to watch the launch at SpaceX headquarters in Hawthorne, Calif.

"There was great elation when we watched the first stage, which was absolutely picture-perfect," said Diane Murphy, SpaceX vice president of marketing and communications.

"Then there was concern when we knew that something had happened in the stage separation," Murphy said.

Murphy said she had no details on the fate of the rocket after the anomaly.

The first stage is powered by a newly-upgraded Merlin 1C main engine, which is fed by kerosene and liquid oxygen propellants. The engine appeared to work normally in the first two minutes of the flight.

"On the plus side, the flight of the first stage with the new Merlin 1C regenerative engine that will be used in Falcon 9 was picture-perfect," Musk said in a statement.

The launch was delayed more than four-and-a-half hours due to technical issues. A countdown attempt earlier Saturday evening ended a split-second before blastoff due to a single parameter that was slightly out of limits.

SpaceX gave little advance notice of the mission, announcing the launch time less than six hours before opening of the launch window.

Saturday's botched launch marks the third failure in three tries for the short-lived company.

Musk, a former Internet entrepreneur, founded SpaceX in 2002 seeking to significantly cut the cost of access to space.

The Falcon 1's maiden flight in 2006 succumbed to a fuel leak and engine fire a few seconds after liftoff.

The second mission reached space in March 2007, but the rocket's second stage spun out of control due to propellant sloshing the liquid oxygen tank and didn't achieve orbit.

Saturday's flight was a critical test for SpaceX. The company already holds contracts for up to 11 more launches of the Falcon 1 and Falcon 9 rockets, including payloads for NASA, the U.S. military and commercial customers.

Those plans are not at risk after Saturday's setback, company officials said.

SpaceX recently accepted a "significant" investment to guard against the possibility of a failure during the Falcon 1's third launch, according to Musk.

"We have the resolve, we have the financial base, and we have the expertise to identify what the problem occurred was, and we will go forward," Murphy said.

SpaceX's backlog includes demonstration flights for NASA's Commercial Orbital Transportation Services program. The COTS program selected SpaceX and Orbital Sciences Corp. to develop new spacecraft to deliver cargo to the international space station after the space shuttle's retirement in 2010.

The Falcon 9 rocket, currently under development by SpaceX engineers, will match the lift capacity of the most powerful Delta and Atlas rockets in the U.S. fleet. It is scheduled to launch from Cape Canaveral early next year.

"Falcon 9 development will also continue unabated, taking into account the lessons learned from Falcon 1," Musk said.

Cargo flights to the space station will launch aboard Falcon 9 rockets. SpaceX is developing the Dragon capsule, a new line of spacecraft designed to ferry crew and cargo to and from the complex.

SpaceX was also lining up for two more Falcon 1 launches from Kwajalein later this year, and Musk said Saturday's failure should not have a significant impact on those plans.

"SpaceX will not skip a beat in execution going forward," Musk said. "We have Flight 4 of the Falcon 1 almost ready for flight, and Flight 5 right behind that."

Musk made a personal commitment to SpaceX employees during a speech to the crowd gathered at company headquarters after the launch.

"There should be absolutely zero question that SpaceX will prevail in reaching orbit and demonstrating reliable space transport," Musk said. "For my part, I will never give up and I mean never."