Hundreds of rescue workers were scouring the hillside where the Yeti Airlines flight, carrying 72 people from the capital Kathmandu, went down. The weather was clear, said Jagannath Niroula, spokesman for Nepal's Civil Aviation Authority.
Local TV showed rescue workers scrambling around broken sections of the aircraft. Some of the ground near the crash site was scorched, with licks of flames visible.
"The plane is burning," said police official Ajay K.C., adding that rescue workers were having difficulty reaching the site in a gorge between two hills near the tourist town's airport.
The craft made contact with the airport from Seti Gorge at 10:50 a.m. (0505 GMT), the aviation authority said in a statement. "Then it crashed."
"Half of the plane is on the hillside," said Arun Tamu, a local resident, who told Reuters he reached the site minutes after the plane went down." "The other half has fallen into the gorge of the Seti river."
The crash is Nepal's deadliest since March 2018, when a US-Bangla Dash 8 turboprop flight from Dhaka crashed on landing in Kathmandu, killing 51 of the 71 people on board, according to Aviation Safety Network.
At least 309 people have died since 2000 in plane or helicopter crashes in Nepal - home to eight of the world's 14 highest mountains, including Everest - where the weather can change suddenly and make for hazardous conditions. The European Union has banned Nepali airlines from its airspace since 2013, citing safety concerns.
Those on the twin-engine ATR 72 aircraft included two infants and four crew members, said airline spokesman Sudarshan Bartaula. There were five Indians, four Russians, one Irish, two South Korean, one Australian, one French and one Argentinian national onboard.
The plane was 15 years old, according to flight tracking website FlightRadar24.
The ATR72 is a widely used twin engine turboprop plane manufactured by a joint venture of Airbus and Italy's Leonardo. Yeti Airlines has a fleet of six ATR72-500 planes, according to its website.
FlightRadar24 said the aircraft was equipped with an old transponder with unreliable data. "We are downloading high resolution data and verifying the data quality," it said on Twitter.
Nepal Prime Minister Pushpa Kamal Dahal has called an emergency cabinet meeting after the plane crash.