Lady Aisha (may Allah be pleased with her) narrates that when we were in the state of Ihram with the Messenger of Allah (peace be upon him), if a caravan passed by us, we would let our sheets hang over our faces. In the narration of Jarir (may Allah have mercy on him), it is mentioned that when they would pass by, and in the narration of Hushaym, it is mentioned that when they would pass by us, we would uncover our faces.
And the evidence that it is permissible for a woman in ihram to cover her face without wearing a niqab or letting the cloth touch her face is that the khimar with which she covers her face, rather she lets the cloth hang down from the top of her head over her face, or she covers her face with her hand or with her sleeve or with part of her clothing, keeping her hand away from her face.
Hadith Referenceصحيح ابن خزيمه / جماع أبواب ذكر أفعال اختلف الناس فى إباحته للمحرم، نصت سنة النبى صلى الله عليه وسلم أو دلت على إباحتها / 2691