And here's the official Army account (Atlas of the Sioux Wars):

Big Foot eluded the cavalry patrols trying to prevent his movement to Pine Ridge by traveling through the Badlands. Therefore, Miles ordered the 7th Cavalry, commanded at the time by Colonel James Forsyth, to intercept Big Foot’s band, disarm them, and march them to a railhead for movement to Omaha. On 28 December 1890, advanced elements of the 7th Cavalry located the elusive Sioux and escorted them to a campsite along Wounded Knee Creek. The remainder of the regiment arrived at the campsite that night. The Sioux awoke the next morning to find themselves surrounded by 500 soldiers and 4 field pieces. Big Foot’s Sioux, with perhaps 120 men and about 200 women and children, recognized the hopelessness of their situation and agreed to be escorted to the railhead for transportation back to the reservation. The old chief was stricken with pneumonia, so the Army provided a heated tent for his care. Forsyth did not expect resistance when he deployed his units to disarm the Indians. However, the Indians grew increasingly upset as the soldiers searched the lodges and clothing of both men and women. The situation suddenly grew more volatile when a medicine man named Yellow Bird called for the warriors to resist. During one search, a soldier and an Indian scuffled for a rifle and the weapon accidentally discharged. Both sides opened fire at brutally close range as the women and children scattered in panic. The artillerymen on the hilltop added to the mayhem when they opened fire on the fleeing Indians. The fighting ended when the Indians fled the battlefield. On the field lay 150 dead Sioux, including Big Foot. The immensity of the tragedy was magnified in that at least 62 of the dead were women and children. The Army suffered 25 officers and soldiers killed and another 39 wounded. Miles was furious over the whole mismanaged affair. He relieved Forsyth of command (the decision was later overturned) and skillfully avoided further violence with the bands associated with the Ghost Dance.