"The death toll might rise as many others have gone missing under the mud," a rescue official said.
The landslide occurred at 3.00 a.m. and has created a large pond in the area, posing new threat for the villagers.
Local administration offices in the region said as many as two dozen houses have been swept away while the Araniko Highway, one of the shortest and busiest routes that connects Nepal with Tibet has also been buried.
"The administration has been planning different measures to open the river blockade and release the water from blocked river," Chief District Officer Gopal Prasad Parajuli said.
"We are also discussing on dropping a bomb from a NA chopper and start the water flow."