Transport Minister Lin Chia-lung told reporters on the scene that the train was carrying about 490 people - higher than an earlier fire department figure of 350.
media said many people were standing as the train was so full, and were thrown about when it crashed, and showed pictures of survivors being led out the tunnel.
"People just fell all over each other, on top of one another," one female survivor told local television. "It was terrifying. There were whole families there." The official Central News Agency said a truck whose handbrake was not engaged was suspected of sliding off a sloping road into the path of the train, and that police had taken in the driver for questioning.
The fire department showed a picture of what appeared to be the truck's wreckage lying next to the derailed train, and an aerial image of the end of the train sitting on the track next to a construction site.
"Our train crashed into a truck," one man said in a video aired on Taiwanese television, showing pictures of the wreckage.
"The truck came falling down."
Part of the train was situated outside the tunnel, and those passengers in carriages still in the tunnel had to be led to safety, Taiwan's railway administration said.
Images showed an injured passenger being stretchered out of the crash scene, her head and neck in a brace, passengers gathering suitcases and bags in a tilted, derailed carriage and others
walking out of the tunnel on the roof of the train.
The accident occurred at the start of a long weekend for the traditional Tomb Sweeping Day, when people return home to look after family grave sites.
Taiwan's mountainous east coast is a popular tourist destination, and the railway line from Taipei down the east coast is renowned for its tunnels and route that hugs the coast just north of Hualien where the crash occurred. The line connecting Taipei with Hualien was opened only in 1979.
Taiwan's state-owned railways are generally reliable and efficient, but have had a patchy safety record over the years.
In 2018, 18 people died and 175 were injured when a train derailed in northeastern Taiwan. In 1981, 30 were killed in a collision in northern Taiwan, and in 1991 another 30 died in a train crash.
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