The government in Nepal says army and police have shot and killed at least 18 Maoist rebels.
Junior Interior Minister Mr Devendra Raj Kandel says the operation is continuing.
He says there have been no casualties on the government side in the fighting 175 miles east of Katmandu.
The attack came hours after the rebels ambushed an army vehicle and killed one soldier and wounded 10 others in Sindhupalchowk district, 100 miles east of Katmandu, The Katmandu Postreported.
The minister says he has no information about the army casualties.
Elsewhere, the rebels shot and killed two workers from the ruling Nepali Congress party in Humla, a village in midwestern Nepal, state-run Radio Nepal.
The clashes occurred during a five-day general strike called by the rebels that ended yesterday.
The strike shut down most of Nepal in the first two days but businesses gradually reopened as people responded to the government's call to defy the rebels.