The military said on Thursday that government forces were attacked as they were attempting to remove landmines planted along the Mechi highway.
A Maoist commander said the rebels had killed 20 soldiers and abducted 20 others after a gun battle near Puwakhola, east of the capital Kathmandu.
The government has not confirmed the rebel estimate of its troop losses.
The commander added that six rebels had also been killed in the clashes, which he said lasted more than two hours.
Rebels have been fighting for a communist republic in Nepal since 1996 and the insurgency has already claimed more than 11,000 lives.