The bus, which was on its way to Srinagar from Jammu, skidded off the road and rolled down into the gorge in Digdol area around 0230 hours due to alleged negligence of the driver, police said.
17 people, including six women and a child were killed, and 34 others injured, 17 of them seriously in the mishap, they said.
Soon after the accident, army, police, quick response teams, CRPF led by Deputy Superintendent of Police S Bali launched rescue and search operation and recovered the bodies from the gorge, he said.
The injured are being shifted to District Hospital Ramban, they said.
Authorities pressed into service chopper and airlifted 17 critically injured passengers to GMC Hospital in Jammu for specialised treatment, he said.
The bus was carrying some tourists, a group of students from Poonch going to the Kashmir Valley for taking part in a recruitment drive and some labourers including those from Gujarat and Punjab.
Some of the injured passengers told police that the driver was asked to break the journey and rest for some time but be decided to go ahead.
The accident took place due to the “negligence of the driver”, a police officer said.
Most of the bodies recovered were badly mutilated, he said.
Newly-elected BJP MP of Udhampur Constituency Jitendra Singh expressed grief over the accident and loss of lives.He expressed sympathies with the family members of deceased.
Singh, who is Delhi to attend the BJP Parliamentary Board meeting, urged authorities to provide medicare facilities to the injured and compensation to families of the deceased.