The bus, carrying 18 passengers, was crushed under a collapsing mountainside in the Bhalughat area, following two days of relentless rain that destabilised the hillside.
A policeman engaged in the rescue operation said the "chances of survival of the passengers are bleak" as a whole mountain came crashing down on the bus."
In Shimla, several vehicles were buried following a landslide near Himland in the heart of the city and the main circular road was blocked, causing inconvenience to school-going children.
The landslide struck around two houses in the congested Inner Akhara Bazaar locality in Kullu early this morning, as residents were asleep, causing widespread panic.