The killing is not yet over, but Indian troops are winning. Current casualty estimates: 154 dead, 327 injured.
Behind the scenes, everyone is trying to make sense of this, and to avoid what could turn into a crisis. The operation was well planned and well executed. The terrorists were trained--by someone, somewhere--and while there is evidence the group was homegrown: the Deccan Mujahideen, or something similar--that doesn't explain the levels of professionalism or support. India, as usual, is pointing to "foreign elements," implying Pakistani involvement. To defuse the situation, the head of Pakistan's intelligence service (ISI) is to visit India and assist with the investigation.
A crisis between India and Pakistan--both equipped with nuclear weapons, and with long-standing hostilities--is in the interest of neither government. It may, however, be in the interest of some elements within one or both governments, and/or other political parties.
Domestically, if the government of India does not blame Pakistan--or some other foreign element--it is stuck with the next obvious question: why didn't they see this coming? And if it is linked directly to the Islamic minority within India, how will the government and people of India change how they treat them now?