Police officials told UNI that the accident happened near Sai Ganzi Badshah at around 8:30 am in which ten people died on the spot while 8 others succumbed to their injuries on way to the hospital.
The driver of the bus, Baldev Raj, also died in the accident.
About 15 seriously injured were admitted to the government medical hospital, Jammu, while others were being provided treatment at the district hospital in Rajouri.
The exact reason for the accident is yet to be ascertained but the police said the driver probably lost control of the vehicle while making a sharp turn on a narrow road in the hilly terrain. The bus was on its way to Rajouri from Prauri.
Meanwhile, Chief Minister Ghulam Nabi Azad visited the district hospital to see the injured admitted there. He expressed grief over the incident and instructed the health authorities to provide best possible treatment to the injured.
Azad also announced an ex-gratia payment of Rs 20,000 each to next of kin of the deceased and 5,000 each to the injured.
The Chief Minister described Rajouri and Doda districts of the state as accident-prone areas and also announced Rs 1 crore for the repair of Rajouri-Dral road.