Witnesses at the scene in Beslan, in the North Ossetia region near Chechnya, saw several bodies on stretchers and Russian news agencies said at least seven people had been dead on arrival at hospital.
Half- or fully naked children gulped from bottles of water after two days without drink in a stiflingly hot and crowded school. Some lay on stretchers. There was no definite toll, although Tass quoted an unidentified official as saying most of the hostages were alive:
"Those children who remained in the school, in general, were not hurt. The ones who suffered were the children in the group which ran from the school and on whom the fighters opened fire."
It was unclear what had triggered the battle, shortly after Russia insisted it would not resort to force to free the hostages held for 53 hours without food or water. Tass said troops had blown a hole in a wall to let hostages escape. It also said soldiers were battling gunmen who had fled to a house in the south of the town.
A Reuters correspondent saw soldiers commandeering civilian cars, apparently to transport the wounded. NTV television said five hostage-takers had been killed. Officials had said some 500 people were being held in the school in North Ossetia, near Chechnya, but released hostages said the number could be nearer to 1,500 people lying on top of one another in increasingly desperate conditions.
Interfax said some of the hostage-takers, believed to number about 40, had tried to break out through crowds of frantic relatives waiting near the school as special forces moved in. The clashes appeared to have begun shortly after authorities said they had sent a vehicle to the school to fetch bodies. Various reports said this had been followed by a break-out attempt by either hostages or rebels.
Alexander Dzasokhov, president of the province of North Ossetia, said earlier the masked gunmen had demanded an independent Chechnya, the first clear link between them and the decade-long separatist rebellion in the neighbouring province.
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."
The siege is the latest in a wave of violent attacks in Russia, 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. 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 Magomed Yevloyev, an Ingush who is believed to have led a mass assault on Ingushetia in June.
Russian President Vladimir Putin, who came to power in 2000 vowing to "wipe out" Chechen militants, pledged to do all he could to save the hostages, but has rejected any compromise on Chechnya's status. Previous hostage crises have ended in huge loss of life.
A representative of Chechen rebel leader Aslan Maskhadov in London repeated denials of involvement by forces loyal to him, and condemned the hostage-takers, saying: "This is a monstrous act ... There is no way to justify what they have done," Akhmed Zakayev told Channel 4 news.
Izvestia said 860 pupils attended School No.1. 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 were believed to have been killed in the early stages of the assault.
03 СЕНТЯБРЯ 16:52