A senior pilot and the co-pilot were killed when the aircraft 9N-AKY crashed while landing in foggy weather at Tenzing-Hillary Airport, also known as Lukla Airport, the gateway to the Mount Everest region yesterday.
The plane, carrying three crew members on board, including a woman, belonged to the domestic airline Goma Air.
The senior captain of the Czech-manufactured LET-410 cargo flight Paras Kumar Rai, 48, died on the spot.
The bodies have been sent for postmortem in Kathmandu.
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Flight attendant Pragya Maharjan, who was injured in the incident, is said to be out of danger.
The cargo plane was piloted by captain Rai, a permanent resident of Bhojpur district in eastern Nepal, Goma Air's officials said.
According to Thakur, round-the-clock efforts to airlift the co-pilot and flight attendant failed due to bad weather.
Two helicopters were put on standby at Lukla to airlift the injured to Kathmandu for treatment, an official said.
According to an eyewitnesses, the plane had hit a tree three metres below the runway threshold and crashed.
"The weather suddenly played foul when the captain was making final approach in one of the world's most 'dangerous airstrip' for landing," airport officials added.
"Rescue operation was carried out by the local people, Nepali Army and police personnel," Pasang Sherpa who witnessed the scene said.
Ministry of Culture, Tourism and Civil Aviation is going to form a high-level panel to investigate the accident, according to Joint Secretary Suresh Acharya, who also heads the aircraft accident investigation division.
The Lukla airport, the gateway to Mt Everest, is considered one of the "world's most dangerous airports" as it demands courage and precision to fly at tiny, treacherous runway perched on a steep cliff.
This is the second major crash with casualty since 2008 at Lukla Airport after the first men to climb Mt Everest.
On October 8, 2008, Yeti Airlines Flight 103 crashed on final approach and caught fire, killing 18 passengers and crew. The aircraft's captain was the only survivor then.