KARACHI, Pakistan — Taliban militants killed dozens of children Tuesday in an attack on an army-run school in the northwestern Pakistani city of Peshawar that left 132 people dead so far, the country's deadliest terrorist attack since at least 2007.
Two attackers are holding 40 teachers and 20 students hostage, Mushtaq Ghani, information minister for Khyber Pakhtunkhwa province, said by phone. Four attackers blew themselves up and another was shot dead by soldiers, he said.
The strike is the worst since the army began an offensive against Taliban insurgents near the Afghan border earlier this year. The military will want to hit back hard as the Taliban looks for more soft targets such as shopping centers and restaurants affiliated with the armed forces, according to Omar Hamid, head of Asia-Pacific country risk at IHS Inc.
"A lot of the kids that go to this school would have parents in the army who are taking part in the operation," Hamid said by phone from London. "It's an attempt to bring the conflict into the homes of the military, especially in Peshawar."
The dead included 123 male students, as well as nine staff members, including a female teacher, Feroze Shah, a local government spokesman in Peshawar, said by phone. The army was in the final stages of clearing out the school, Asim Bajwa, army spokesman, said on Twitter.
The Pakistani Taliban claimed responsibility for the attack, according to the Express Tribune, citing Muhammad Khorasani, a spokesman for the group. The attack was in retaliation for the military's operation in North Waziristan and Khyber tribal agency, it said.
"This is a decisive moment in the fight against terrorism," Prime Minister Nawaz Sharif told reporters in televised remarks from Peshawar. "The people of Pakistan should unite in this fight. Our resolve will not be weakened by these attacks."
Terrorism has killed more than 50,000 people in Pakistan since 2001 and complicated efforts to revive South Asia's second-biggest economy. Tuesday's strike is the deadliest on a school since a 2004 assault by Islamic militants in Russia, according to Rohan Gunaratna, head of the International Centre for Political Violence and Terrorism Research in Singapore. Some 350 people died then in Beslan, North Ossetia, half of them children.
It also came a day after a self-proclaimed Islamic cleric from Iran held 17 hostages at a Sydney cafe for 16 hours. He died along with two hostages.
"Due to the momentum of events in Syria and Iraq, the number of groups in Pakistan have become more galvanized," Gunaratna said. "You can see a trend toward hostage taking and barricade-type situations. It's a very serious situation."
Nawaz Sharif and Army Chief Raheel Sharif both flew to the site of the attack Tuesday, according to news reports. Five of the terrorists were killed, the army said. The U.S. Embassy condemned the attack.
Television images showed armored vehicles rolling into the area near the school building as soldiers leaped out of vans. Mothers were shown running toward the gate of the school and crying inside the hospital.
Pakistan's benchmark KSE100 Index fell 2.6 percent, the most in four months. Oil and Gas Development Co., the nation's biggest explorer, fell by the limit of 5 percent, the most in three years.
Pakistan's military started a ground offensive in June to flush out militants from North Waziristan, a tribal region on the Afghanistan border the U.S. has called the "epicenter" of terrorism. That came after successive Taliban attacks on a Pakistan International Airlines Corp. flight and Karachi's international airport.
After the U.S. invaded Afghanistan in 2001, North Waziristan became a safe haven for foreign militants like Uzbeks and Turks who fought alongside the fallen Taliban regime. In 2007, militant groups in the area united to form the Tehrik-e- Taliban Pakistan, or TTP, which went on an offensive toward Islamabad.
After Pakistan's army flushed them out of the Swat valley and most tribal regions, it resisted U.S. pressure to follow through with a push into North Waziristan, which was also home to the Haqqani network and Gul Bahadur, who were fighting American troops in Afghanistan.
Unable to convince Pakistan to take action, the Obama administration intensified its campaign of drone attacks that President George W. Bush started in 2004.
Nawaz Sharif told U.S. Secretary of State John Kerry earlier this month that militants were cleared from 80 percent of North Waziristan, state-run Pakistan Radio reported. He called on the international community to better recognize Pakistan's anti-terrorism efforts.
"Few have suffered more at the hands of terrorists and extremists than the people of Pakistan," the U.S. Embassy in Islamabad said in a statement. "That is why it remains essential for the United States and Pakistan to continue to work together to secure peace and stability in the region."
Taliban militants claimed responsibility for a suicide blast at the India-Pakistan border last month that killed 53 people. Tuesday's attack was Pakistan's deadliest since 2007, when a suicide bomber killed more than 140 people at a political rally for former Prime Minister Benazir Bhutto, who was later assassinated.
Schools are frequent targets for Taliban militants, according to Rashid Ahmad Khan, a professor of international relations at the University of Sargodha in Punjab province.
"This is blowback from the militant side amid the ongoing army operation in North Waziristan," Khan said by phone. "It's a reaction. It's a desperate attempt from the militants to embarrass the government."