The bus with Indian number plate was carrying around 45 pilgrims from Gujarat who were returning to Gorakhpur in India after a pilgrimage to Pashupatinath Temple in Kathmandu, Superintendent of Police Bishworaj Pokharel said.
Rescue efforts are going on at the accident site, which lies along the Tribhuvan Highway, with the help of security personnel and the local people, he said.
The injured passengers have been rushed to Kathmandu for medical treatment. The condition of six injured is critical.
The famous 5th century Pashupatinath temple is dedicated to a manifestation of Shiva called Pashupati (Lord of Animals). It attracts thousands of pilgrims each year, mostly from India.