What a horrible, awful tragedy. The responsibility for this lies squarely with the terrorists who created an impossible situation. Give in to their demands and you encourage more of the same. Try to storm the building and you risk a heavy loss of life, in this case including many children.
As it happens, it appears that the situation deteriorated after some hostages escaped and after a bomb accidentally exploded. This illustrates another aspect of the situation created by the terrorists: in a fraught, tense situation with lots of explosives, there is ample scope for simple error/accident leading to disaster.
Where do we go from here?
How do we deal with people willing to fly planes into buildings, or to pack children and explosives together in a gym or who think it just fine and will aid their cause to strap explosives to themselves and go and blow up a bus or a pizza parlour?
How do we deal with such insanity?