To a dog, kids are scary -- constant commotion, loud voices and high energy. To a dog who is content with quiet, fearful, older or resting, this is a recipe for aggression toward the little beings upsetting his world. Snapping should never be tolerated, but mutual respect improves the situation.
Prohibit your kids from hugging the dog around this neck; he sees this as threatening. Instead, have your children allow him to sniff their hand -- if he is not already snapping at them -- and pet him under the chin.
Teach your child to turn his body sideways when he pets the dog, and avoid looking your dog in the eye. Both maneuvers assist your dog in relaxing and not seeing the child as a threat.
Refrain from giving your dog any affection when he snaps at the kids in an effort to calm him. If he knows that his snapping will win loving attention, the behavior will continue and may escalate.
Give the dog a complete time-out from the kids. Advise them they are not to touch him, talk to him or interact with him while you work on his training and re-establish all humans as his pack leaders.
Keep the kids out of your dog's space. Avoid territorial issues over food or toys and allow your dog to have areas in the house where the kids are not allowed to play with him.
Do not punish your dog when he snaps at the kids, other than saying a firm "no" and removing him from the room to a safe area, such as his crate. This avoids giving him unnecessary attention or encouraging further hostility from him.