|Assistant Secretary of State Christine Rocca, left, shakes hands with Nepal's FM Ramesh Nath Pandey in Katmandu|
The army says three policemen and one Nepali soldier were also killed in the fighting near Bandipur, 450 kilometers east of Nepal's capital Kathmandu.
Dozens of civilians were injured in the clashes.
Meanwhile, U.S. Deputy Assistant Secretary of State Christine Rocca is in Nepal in an effort to press King Gyanendra to restore democratic rule and civil liberties that were suspended when he seized power February 1.
The king said he dismissed the government because it failed to crush Nepal's growing Maoist insurgency, which has claimed more than 11,000 lives since 1996
Some information for this report provided by AP and Reuters.