The horror incident took place at the village of Ask and caused several houses to be swept away.
Approximately 5,000 people could be without homes after the building collapsed in the town.
The rockfall occurred overnight and police are currently searching for people buried under the rock.
Rescue operators have stated 21 people have yet to be found.
A further 700 residents from the town have also been evacuated by the emergency services.
The army and 40 volunteers have also descended on the scene to assist with the recovery operation.
Norwegian media reports have stated nine people have been injured as weel as the seven fatalities.
Rescue operations manager Roger Petersen told broadcaster NRK: “Police are designating this as a disaster.
“We have received messages from desperate people who have called the police emergency phone and said that the whole house is in motion and that they are under roof tiles and insulation also further.
“So there are dramatic messages and the situation is serious.”
The police added: “Emergency services, with assistance from the Norwegian civil defence and the military, are in the process of evacuating.”
“We are considering whether we need to expand the area that needs to be evacuated.”
More to follow…