Earlier, at least three explosions were heard inside the high school, and a MailOnline journalist at the scene said he heard heavy gunfire.
A security official speaking on condition of anonymity said two helicopter gunships are on site, but had been prevented from firing on the militants because students and teachers were inside the building.
Outside, as the helicopters rumbled overhead, police struggled to hold back distraught parents who were trying to break past a security cordon and get into the school.
Akhtar Ali, who works out for the UN, was weeping outside.
He told MailOnline: 'My 14-year-old niece Afaq is inside the school. I don't know if she is alive or dead. I am desperate. I am just waiting in hope. It is agony. '
'My son was in uniform in the morning. He is in a casket now,' wailed one parent, Tahir Ali, as he came to the hospital to collect the body of his 14-year-old son, Abdullah.
'My son was my dream. My dream has been killed.'
MailOnline spoke to Naveed Ahmed, who works at the irrigation department. He said: 'My son Hasid Asmad is 16-years-old, is still inside the school., He took a mobile and called me while I was in the mosque, he was praying down the phone. I have been waiting so many hours for news. My son told that he was being kept safe by the Pakistan army inside. They are taking a picture of them to prove they are safe.
'They have told me that the children are safe in the custody of the army.'
Mrs Humayun Khan, one of the mothers of a student, said with tears in her eyes: 'No body is telling me about my son's whereabouts... I have checked the hospital and he is not there. I am really losing my heart. God forbid may he's not among the students still under custody of terrorists.'
A student who survived the attack said soldiers came to rescue students during a lull in the firing.
'When we were coming out of the class we saw dead bodies of our friends lying in the corridors. They were bleeding. Some were shot three times, some four times,' the student said.
'The men entered the rooms one by one and started indiscriminate firing at the staff and students.'
Zakir Ahmad, who runs an electronics store in Peshawar, has lost his 16-year-old Abdullah and is frantically searching for 12-year-old Hassnain, who is still missing hours after the atrocity.
Crying and barely able to speak, he told MailOnline: 'When I heard there was an attack I ran to the school. I heard firing. I sent my cousins and staff to search the hospitals while I stayed praying at school. Then after an hour I got the call, he just said Abdullah is dead. I have found him in the hospital. I still don't know anything about my boy Hasnain.
This is a terrible injustice. We are innocent people, my boys are innocents who do not carry guns and bombs. The only justice for me is to find these people who are supporting extremists and hang them in rows. Make them die for what they did.
'My son was such a good boy. Obedient, bright. When he was going to school this morning he came into my room and kissed me.'
Mushtaq Ghani, the spokesman for the provincial government of Khyber Pakhtunkhwa, told journalist Aamir Iqbal: 'At least six militants wearing military uniforms entered the school from back wall of the school that is known as 'Army Public School'.
'There is a graveyard attached to back wall of the school that is run by Pakistani Military, most of the students studying in this school were children of military officers.
'Attacking innocent children is the most abominable crime and such an attack will not be accepted at all.
'This can be the reaction of ongoing military operations against terrorists in the North Waziristan area of Pakistan.'
Student Shuja khan claimed that 'the attack took place the time a senior military officer started his address during the function that was going on inside the school'.
He added: 'I am not sure but he was the Corp Commander Peshawar who when he started his speech terrorists opened fire on the students sitting in the function.'
Mohammad Khorasani, the spokesman for the Pakistani Taliban group - known as Tehrik-i-Taliban - accepted responsibility for the attack.
He said: 'It's a gift for those who thought they have crushed us in their so called military operation in North Waziristan.
'They [the Pakistani military] were always wrong about our capabilities, We are still able to carry out major attacks. Today was just the trailer.
'Six of our Mujahideen, including three suicide bombers took part in this attack and with the grace of almighty they all executed the plan very accurately.
'We selected the army's school for the attack because the government is targeting our families and females. We want them to feel the pain.'
The military intelligence agencies have now arrested prayer leaders of Behari and Aabshar colony, which is adjacent to the Army Public School, along with 27 other suspected people from the nearby streets.
One of the prayer leaders is said to be Khaliq jan from Darra Adam Khel, some 23 kilometers South of Peshawar. All the arrested people have been taken away to an unknown location for interrogation.
Sources have said that even the senior figures of the provincial government have not been informed about the identification of the detainees. Senior army officials in Peshawar, however, know who has been arrested.
It is believed that terrorists have been provided refuge by locals in streets adjacent to the school.
As night fell, officials could sill be seen in the streets, trying to piece together information.
The insurgents had inside knowledge that wives of certain army officials were teachers in the school.
Wife of Subedar Abbass was torched to death, while wives of Brigadier Tariq and Major Jamshed were also killed.
A son of Subedar Mazhar, who was student, was also killed when he was identified by terrorists
It also emerged this afternoon that terrorists have codes for every city of Pakistan and every government installation.
The code of Islamabad is Kafristan - city of infidels.
Sources said agencies had information about planned attacks at English medium schools in Islamabad, but not in Peshawar.
This information was obtained by tracing a phone call of one of the terrorists. But they attacked a school in Peshawar.
132 children shot dead as Taliban gunmen storm military-run school in Peshawar in Pakistan | Daily Mail Online
all over again...
