The formation of defects in bcc Mo lattice as a result of 50-keV Xe bombardment is studied via atomistic simulation with an interatomic potential developed using the force-matching ab initio based approach. The defect evolution in the cascade is described. Diffusion and interaction of interstitials and vacancies are analyzed. Only small interstitial atom clusters form directly in the cascade. Larger clusters grow only via aggregation at temperatures up to 2000 K. Stable forms of clusters demonstrate one-dimensional diffusion with a very high diffusion coefficient and escape quickly to the open surface. Point vacancies have much lower diffusivity and do not aggregate. The possibility of a large prismatic vacancy loop formation near the impact surface as a result of fast recrystallization is revealed. The mobility of the vacancy dislocation loop segments is high, however, the motion of the entire loops is strongly hindered by neighbor point defects. This paper explains the existence of the large prismatic vacancy loops and the absence of the interstitial loops in the recent experiments with ion irradiation of Mo foils.