Emergency teams have so far recovered only eight bodies since the landslide early on Saturday blocked a mountain river, causing the water to form a lake that was threatening to burst and sweep several villages.
Fresh rainfall on Sunday hampered search attempts.
"We have no chance of finding any of the missing people alive under this pile of debris," said Yadav Prasad Koirala, who heads the government's Department of Natural Disaster Management.
"We have names of 159 people who are believed to be missing and buried, but there could be even more people."
Mr Koirala said it was even difficult for bulldozers and heavy equipment to move the debris that crushed dozens of houses in the village of Mankha, about 75 miles east of Kathmandu, Nepal's capital.
The water level and mud is making the rescue work very difficult and troops have used explosives to try to alleviate a dangerous build-up of water.
A resident said he feared his entire village had been wiped out.
The Arniko highway, which connects Nepal to Tibet, remains closed.