Wednesday's catastrophic flood caused by a glacier collapse killed 489 people in Nepal and five in China's Tibet, with almost 1000 more missing in the two countries.
A huge torrent of rock, ice, mud and debris cascaded through Himalayan mountain river systems after the collapse, and also led to the formation of a lake where water continued to collect and rise.
On Friday, the lake's reservoir had topped 2.5 million cubic metres of water, up from the estimated 1.5 million-2 million cubic metres recorded a day earlier, before overflowing into the Bhotekoshi River, authorities and witnesses in Nepal said.
"We have received a notice saying that the lake has broken its banks," Narendra Pariyar, the most senior bureaucrat in Nepal's flood-hit Rasuwa district, told Reuters.
"But we do not know how big it is and how high is its water level. We can see that the level of water in the river is rising."
People ran to higher ground carrying belongings as announcements were made warning them to stay away from the river and police personnel remained on standby with ropes and stretchers, Reuters witnesses said.
"Everyone started saying 'run', so I ran. The siren in Bidur (town) also went off. I was very scared," Shanti Tamang, 40, told Reuters.
Rescue workers were also asked to move to safer places along with their equipment.
The risk of the lake bursting prompted all Chinese rescue personnel and vehicles to withdraw and stand by in a safe area, state broadcaster CCTV said on Friday.
Rescue operations were later resumed "as the risk posed by the upstream dammed lake was deemed manageable", it said.
Authorities in Nepal stopped rescue operations for 90 minutes but resumed later, an army officer said.
Wednesday's flood ripped through villages and valleys, destroying power stations, roads and bridges along a route that links Kathmandu with Lhasa in Tibet and is popular with trekkers and pilgrims.
Of those missing, at least 540 are foreigners - of whom at least 38 are Australians - many of them Hindu pilgrims from India headed to the holy Mount Kailash and Lake Mansarovar in Tibet.
In Beijing, China's Politburo met on Friday to direct rescue work, state media reported.
Authorities must "scientifically formulate search-and-rescue plans, make every effort to search for missing people from China and abroad", the meeting chaired by President Xi Jinping said, according to state news agency Xinhua.
The meeting said rescue work faced "extremely difficult challenges" and called for stronger monitoring of glacier lakes, landslide risks and barrier lakes, emergency aid to affected areas in Nepal, and closer international disaster co-operation.
Earlier, Nepalese rescue teams used helicopters to search for survivors and drop emergency supplies to thousands cut off in towns and valleys, while emergency services - some using sniffer dogs - recovered dozens of bodies swept down into the plains.
While offers of assistance are pouring in, Nepal said it did not need help from other nations in search-and-rescue missions.
A South Korean rapid response team is already in Kathmandu but has not been deployed because the Nepali government does not have a plan to accept foreign rescue yet, according to the foreign ministry in Seoul.
Chinese rescuers had yet to reach the worst-hit area on the Chinese side of the border, the Gyirong border crossing, by Thursday evening, state media reports indicated, as crews worked to clear debris from the key access road leading to the area.
Dramatic footage on Wednesday showed enormous torrents of muddy water and debris tearing through structures in the border crossing area within seconds and engulfing people trying to flee.
The tally of missing in Tibet's Gyirong County was 558, Chinese state broadcaster CCTV said on Thursday, including 260 foreign nationals.
So far, just five people have been confirmed dead on the Chinese side.
