BESLAN - Soldiers blew a hole in the wall of a school in southern Russia and fought a gunbattle with Chechen separatists to end a two-day hostage seige.
Children ran screaming from the school in Beslan, North Ossetia, amid explosions and machinegun fire.
TheInterfax news agency reported that all hostages had been evacuated from the school, but an AFP correspondent said at least 10 people, children and adults, were been taken out dead.
Tass news agency reported that troops were in "full control" of the building and quoted a Russian official as saying most of the hostages were alive.
Witnesses reported continuing gunfire, however, and a Reuters correspondent reported seeing some of the terrorists attempting to escape to a nearby railway junction.
Tass said up to 200 wounded hostages has been taken to local hospitals. It quoted local police as saying that others with more serious wounds were taken to the regional capital Vladikavkaz for treatment. It gave no figures for those.
Soldiers carried children away from the school, some covered in blood, as military helicopters circled overhead and ambulances ferried wounded hostages away, all to the sound of continuous gunfire.
At least 10 cars and ambulances full of people were seen leaving the scene.
The Interfax news agency quoted a Russian official as saying most of the children taken hostage at school on Wednesday were alive.
Tass also reported that some 40 children had been evacuated from the school by 1.50pm (9.50pm NZT).
NTV television reported that at least five of the hostage-takers - who had been demanding Chechen independence - were killed.
Russian news agencies said a group of hostages had escaped, and a Reuters correspondent saw soldiers carrying children away from the school, some of them covered in blood, as ambulances sped to the scene and military helicopters circled overhead.
The Interfax news agency said the school's roof had collapsed, according to authorities, and that 30 hostages had been rescued.
It was not clear what had triggered the battle, a few hours after Russia insisted it would not resort to force to free the children, parents and teachers being held for a third day without food or water.
Officials said some 500 people were being held in the school in North Ossetia, near Chechnya, but released hostages said the number could be nearer 1500, lying on top of each other in increasingly desperate conditions.
Alexander Dzasokhov, president of the province of North Ossetia, said the 40 or so masked gunmen were demanding an independent Chechnya, the first clear link between them and the decade-long separatist rebellion in the neighbouring province.
But he tried to reassure hundreds of distraught parents who spent the night near the school in the town of Beslan, telling reporters: "I tell you frankly and honestly ... the option of force is not being considered."
Reports from some of the women and children released on Thursday painted a grim picture.
"You know, there aren't 350 people (the previous official number) in there, but 1500 in all. People are lying one on top of another," Zalina Dzandarova, a 27-year-old woman, told the daily Kommersant.
One unidentified woman freed on Thursday told Izvestia that during the night children occasionally began to cry:
"Then the fighters would fire in the air to restore quiet. In the morning they told us they would not give us anything more to drink because the authorities were not ready to negotiate.
"When children went to the toilet, some tried to drink from the tap. The fighters stopped them straight away."
Dzasokhov said the captors had made their demands in talks on Thursday with Ruslan Aushev, a moderate former leader of nearby Ingushetia province, who has taken on a mediating role.
"The demands relayed to Aushev yesterday ... were that Chechnya must be an independent state," he said.
The school siege is the latest in a wave of violent attacks in Russia in recent weeks, all linked to Chechen separatists.
Last week, suicide bombers were blamed for the near-simultaneous crash of two passenger planes in which 90 people died. And this week, in central Moscow a suicide bomber blew herself up, killing nine people.
Russian media have speculated that the gunmen could belong to separatist forces under field commander Magomed Yevloyev, an Ingush who is believed to have led a mass assault on Ingushetia in June.
With the clock ticking for President Vladimir Putin to end the crisis, security experts warned of a possible bloody end.
Putin, who came to power in 2000 vowing to "wipe out" Chechen militants, pledged to do all he could to save the hostages.
But he has refused any suggestion of a compromise on Chechnya remaining part of Russia. Previous ends to hostage crises have ended in huge loss of life.
Izvestia said 860 pupils attended School No 1 in Beslan. But the number of people on the campus would have been swollen by parents and relatives attending the first-day ceremony traditional in Russian schools.
Up to 16 people are believed to have been killed in the early stages of the assault.
Dzandarova said the masked gang struck at 9am on Wednesday, shooting into the air.
"Everybody, parents and children, ran in panic into the school building," she said, adding that the attackers killed people left in the school yard and those who resisted.
Two women assailants blew themselves up in a corridor, killing a number of male hostages. Hostages were later herded into the school gym, where the captors booby-trapped the basketball hoops, an unidentified mother told Izvestiya.
Dzandarova added: "They took some of the injured out of the gym and finished them off right there in the corridor."
The unnamed mother said the captors were well organised: "None of the terrorists removed their masks. Nobody can see their faces. They aren't tired. They are resting in turns."
CHRONOLOGY
Wednesday
* Gunmen seize the hostages at a school in the North Ossetian town of Beslan on Wednesday, first day of school term. Between seven and 16 people are killed.
* Hostage-takers, numbering between 17 and 40, threaten to kill 50 children for every fighter killed.
* Within hours, nearly 50 children manage to escape. Gunmen set free 15 more.
* Putin breaks off his seaside holiday and returns to Moscow.
* Russia sends troops to guard nuclear facilities.
* Representative of Chechen rebel leader Aslan Maskhadov denies involvement by forces loyal to him.
* UN Security Council demands release of hostages.
