Russian special forces stormed the building after two explosions came from the school, one of which collasped part of its roof. This Associated Press article has more information. There are supposedly still three militants with hostages in the school's basement, while others may have escaped in the confusion of the battle.

The violence began after militants had agreed to let Russia retrieve the bodies of people killed early in the raid. Explosions went off as the emergency personnel went to get the bodies at around 1 p.m., collapsing part of the roof of the building, and hostages took the noise as a signal to flee, officials said.

Militants opened fire on fleeing hostages and security forces returned fire. Once the hostage-takers sought to escape, Russian officials apparently made the decision to storm the building.

According to the president of North Ossetia, the Russian government was talking to Maskhadov in hopes that he would be able to get the hostages released.
Mr. Dzasokhov, meeting with relatives in a social center that would soon reverberate with nearby gunfire and explosions, said he had orders to open a channel to Alsan Maskhadov, the separatist leader who served as Chechnya's president until fleeing invading Russian forces in 1999.

Mr. Dzasokhov and Ruslan Aushev, the regional political leader who negotiated the release of 26 women and children on Thursday, both called Mr. Maskhadov's chief representative abroad, Akhmed Zakayev on Thursday evening and again this morning.