Government administrator Shiv Ram Gelal said the bus drove off the road
near Ramche village and rolled about 150 meters (500 feet) down a slope.
Gelal said the bus was overcrowded because of a severe fuel shortage in the country that has limited transportation.
Police, soldiers and local villagers helped recover injured people and bodies from the wreckage.
Police were investigating the accident, which occurred about 80 kilometers (50 miles) northwest of the capital, Kathmandu.
Accidents in Nepal are generally caused by poorly maintained roads and vehicles.
The severe fuel shortage has forced people to travel on the roofs of
buses, which generally is not allowed for safety reasons. It has become
common to see bus roofs packed with people and police rarely stop them.
Ethnic protesters have blocked a key border point with India since September, which has prevented the import of fuel and other supplies.
Nepal normally gets all of its fuel from India.
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