Pervez Khattak, the chief minister of the province where the attack is underway, said scores of those killed in the Tuesday attack were mostly "children" but hospital officials earlier said at least one of the fatalities was a teacher and one security official were also among the dead.
Khattak says the fighting is still unfolding at the school.
The attack began in the morning as the gunmen shot at random students in grades 1-10. Army commandos quickly were on the scene and exchanged fire with the gunmen, officer Javed Khan said.
Outside the school, shooting was initially heard along with one loud bang of unknown origin. Details were sketchy in the unfolding situation and it was unclear what was going on inside and if there were any hostages among the students.
Pakistani television showed soldiers surrounding the area and pushing people back.
Jamil Shah, a spokesman for Lady Reading Hospital said at least one paramilitary solider was killed in the attack. It was not clear whether the soldier was already on the scene when the violence began or was part of the troops who arrived later.
The Pakistani military said in a statement that a rescue operation was underway and that most of the students and the staff had been evacuated. The school is located on the edge of a military cantonment in Peshawar, but the bulk of the students are civilian.
Later, one of the wounded students, Abdullah Jamal, said that he was with a group of 8th, 9th and 10th graders who were getting first-aid instructions and training with a team of Pakistani army medics when the violence began for real.
When the shooting started, Jamal, who was shot in the leg, said nobody knew what was going on in the first few seconds.
"Then I saw children falling down who were crying and screaming. I also fell down. I learned later that I have got a bullet," he said, speaking from his hospital bed.
"All the children had bullet wounds. All the children were bleeding," Jamal added.
Taliban spokesman Mohammed Khurasani claimed responsibility for the attack in a phone call with the media. The attack was revenge for the killings of Taliban members at the hands of Pakistani authorities.
