“… As for what some people do regarding activities of suicide, tying explosives to themselves and then approaching unbelievers and detonating them amongst them, then this is a case of suicide – and Allaah’s refuge is sought.
So whoever commits suicide then he will be considered eternally to Hell-Fire, remaining there forever, as occurs in the hadeeth of the Prophet (saw):
“And whoever kills himself with an iron weapon, then the iron weapon will remain in his hand, and he will continuously stab himself in his belly with it in the Fire of Hell eternally, forever and ever.” [Bukhaaree & Muslim]
Because this person has killed himself and has not benefited Islaam. So if he kills himself along with ten or a hundred or two hundred other people, then Islaam will not benefit by that, since the people will not accept Islaam, contrary to the story of the boy.
Rather it will probably just make the enemy more determined, and this action will provoke malice and bitterness in his heart to such an extent that he may seek to wreak havoc upon Muslims.
So what we hold is that those people who perform these suicide (bombings) have wrongfully committed suicide, and that this necessitates entry into Hell-Fire, and Allaah’s refuge is sought, and that this person is not a martyr (shaheed).”
[Taken from the shaykh’s explanantion of Riyaadhus Saaliheen 1/165-166, while discussing the story of the boy and the king]