The bright “cone” was filmed soaring over the Urals and Volga regions.
It seemed blue in colour and also sparked fears of a meteorite.
One onlooker, posting in Saratov, said: “Some kind of UFO. Did anybody else see it too? Something really unusual, what was it? Then it flashed…and soon disappeared.
Sofya Salova, from Ufa, said: “We went for a walk with the children and saw a UFO over the city.
“It was unknown and surprising.
“At first it was just a bright spot, then it flashed to the right like a large torch, made a light ‘fart’ – sorry I can’t find a better word – and just vanished.”
But it has since become clear that the UFO was not aliens or a lump of space rock but a test launch of a Topol-M intercontinental ballistic rocket by Vladimir Putin’s strategic missile forces.
Footage released by the Russian defence ministry showed the launch from the Kapustin Yar firing range in Astrakhan region.
Some feared the rocket launch was “something nuclear”, but the missile did not contain live warheads.
The Topol-M is a strategic intercontinental ballistic missile system developed at the end of the Soviet era.
It is capable of carrying an 800 kiloton warhead with the destructive power of 800,000 tonnes of TNT.
This is 40 times the destructive power of the atomic bomb detonated over Nagasaki, Japan in 1945.
It is not the first time Putin’s missile tests have sparked fears across his country.
A similar jellyfish-like UFO was seen shooting across the sky in June 2018.
One witness at the time said: “Probably, for the first and last time, I observed the effect of ‘jellyfish’ from a rocket launch.
“It’s an incredible sight, I unexpectedly saw it and had to stop my car to get a better look.”