I don't think it's unlikely that the occurrence of child sacrifice may have been "inflated" by hostile observers, but Diodorus Siculus gives a very specific description of what took place there, which I think is unlikely to have been pure invention.
14 Therefore the Carthaginians, believing that the misfortune had come to them from the gods, betook themselves to every manner of supplication of the divine powers; and, because they believed that Heracles, who was worshipped in their mother city,29 was exceedingly angry with them, they sent a large sum of money and many of the most expensive offerings to Tyre. 2 Since they had come as colonists from that city, it had been their custom in the earlier p179period to send to the god a tenth of all that was paid into the public revenue; but later, when they had acquired great wealth and were receiving more considerable revenues, they sent very little indeed, holding the divinity of little account. But turning to repentance because of this misfortune, they bethought them of all the gods of Tyre. 3 They even sent from their temples in supplication the golden shrines with their images,30 believing that they would better appease the wrath of the god if the offerings were sent for the sake of winning forgiveness. 4 They also alleged that Cronus31 had turned against them inasmuch as in former times they had been accustomed to sacrifice to this god the noblest of their sons, but more recently, secretly buying and nurturing children, they had sent these to the sacrifice; and when an investigation was made, some of those who had been sacrificed were discovered to have been supposititious. 5 When they had given thought to these things and saw their enemy encamped before their walls, they were filled with superstitious dread, for they believed that they had neglected the honours of the gods that had been established by their fathers. In their zeal to make amends for their omission, they selected two hundred of the noblest children and sacrificed them publicly; and others who were under suspicion sacrificed themselves voluntarily, in number not less than three hundred. 6 There was in their city a bronze image of Cronus, extending its hands, palms up and sloping toward the ground, so that each of the children when placed p181thereon rolled down and fell into a sort of gaping pit filled with fire.Rogue Classicist also has reservations about the way the story is presented in the media.
PLoS ONE doi:10.1371/journal.pone.0009177
Skeletal Remains from Punic Carthage Do Not Support Systematic Sacrifice of Infants
Jeffrey H. Schwartz et al.
Two types of cemeteries occur at Punic Carthage and other Carthaginian settlements: one centrally situated housing the remains of older children through adults, and another at the periphery of the settlement (the “Tophet”) yielding small urns containing the cremated skeletal remains of very young animals and humans, sometimes comingled. Although the absence of the youngest humans at the primary cemeteries is unusual and worthy of discussion, debate has focused on the significance of Tophets, especially at Carthage, as burial grounds for the young. One interpretation, based on two supposed eye-witness reports of large-scale Carthaginian infant sacrifice [Kleitarchos (3rd c. BCE) and Diodorus Siculus (1st c. BCE)], a particular translation of inscriptions on some burial monuments, and the argument that if the animals had been sacrificed so too were the humans, is that Tophets represent burial grounds reserved for sacrificial victims. An alternative hypothesis acknowledges that while the Carthaginians may have occasionally sacrificed humans, as did their contemporaries, the extreme youth of Tophet individuals suggests these cemeteries were not only for the sacrificed, but also for the very young, however they died. Here we present the first rigorous analysis of the largest sample of cremated human skeletal remains (348 burial urns, N = 540 individuals) from the Carthaginian Tophet based on tooth formation, enamel histology, cranial and postcranial metrics, and the potential effects of heat-induced bone shrinkage. Most of the sample fell within the period prenatal to 5-to-6 postnatal months, with a significant presence of prenates. Rather than indicating sacrifice as the agent of death, this age distribution is consistent with modern-day data on perinatal mortality, which at Carthage would also have been exacerbated by numerous diseases common in other major cities, such as Rome and Pompeii. Our diverse approaches to analyzing the cremated human remains from Carthage strongly support the conclusion that Tophets were cemeteries for those who died shortly before or after birth, regardless of the cause.