Kathmandu  - At least two people were confirmed dead and more than 20 others missing after a passenger boat capsized on Koshi River in eastern Nepal, officials said Sunday.

The boat carrying more than 40 people was crossing Koshi River when it capsized Sunday morning in Sunsari district, about 400 kilometres south-east of the capital Kathmandu.

Police said rescue workers found bodies washed up near a village in the Indian side of the border, but were hampered by poor weather conditions.

"Rescue workers are facing problems searching for the missing as the area is covered in heavy fog, reducing the visibility to less than 300 metres," district administrator Durga Bhandarisaid.

Bhandari said most of the passengers were women and children.

The cause of the accident was not immediately known but officials said overloading could have been a factor.

Local residents pulled out at least 15 passengers to safety, and police and soldiers were pressed into rescue operations.

People have been forced to use boats and ferries to cross Koshi River after devastating floods last year washed way portions of the main highway linking the eastern part of the country with the rest of Nepal.

Reconstruction of the highway and several damaged bridges has been slow and is not expected to be completed for another four months. dpa