Nepali army keeps up hunt for Maoist rebels

More than 70 people were also wounded in Monday's attack at Madi village in the Maoist-controlled district of Chitwan, about 180km southwest of Kathmandu, the army said.

The army and the government has laid the blame squarely at the door of the Maoist rebels who have been waging a bloody insurgency for the past nine years, but no one has claimed responsibility.

"The search to locate the culprits is continuing but they normally blast or attack and run away," army major Sushil Dahal told AFP.

As the bus passed Madi as much as 50kg of explosives buried underneath the road was detonated. The vehicle was crammed with more than 100 passengers, some sitting on the roof.

"The terrorists knew that very few vehicles operated on the route and despite the fact that they could see a lot of people travelling inside and on the rooftop of the bus, they blasted it," an army statement said.

Witnesses said the bus was torn apart by the force of the blast and passengers were hit by shrapnel and shards of metal and glass.

"(The bus) rose into the air... quite high and came down and split into two," an army officer said, quoting witnesses.

Police superintendent Surendra Bahadur Shah said the attack was the work of "terrorists", a word the police and military in Nepal use to describe Maoist rebels.

However there was no claim of responsibility from the Maoists, who have been fighting to install a communist republic in Nepal since 1996. The insurgency has already claimed more than 11,000 lives.

Officials said many of the victims of Monday's attack were women and children, and three military personnel on their way home for vacation were among the dead.