"People were bringing little children to Jesus for him to place his hands on them, but the disciples rebuked them." NIV translation
At this time, there were many people coming to Jesus for physical healing and for blessing. People were bringing their kids for this as any good parent wants the best for their child. The disciples tried to stop this as they were beginning to understand that the ministry was more about the spiritual things than the physical.
"When Jesus saw this, he was indignant. He said to them, 'Let the little children come to me, and do not hinder them, for the kingdom of God belongs to such as these. Truly I tell you, anyone who will not receive the kingdom of God like a little child will never enter it.'" NIV translation
The disciples did not understand the law of love which was demonstrated by the children. True love cannot be earned and cannot be kept to yourself. The children did not think that they could bring anything to Jesus except themselves and Jesus explained that it was the same with salvation.
Any attempt to bring our actions (other than accepting Jesus like a child), denies the fact that salvation is by grace. The simplest definition of grace is that it is a gift and, if and when you try to pay for a gift it no longer is a gift. The phrase "kingdom of God" refers both to the reign of God in the hearts of men on this earth as well as the physical dwelling of God with men in the future on the new earth.
"And he took the children in his arms, placed his hands on them and blessed them." NIV translation
Jesus gave a physical demonstration of His love and the fact that it was freely given. It reminds us that, if we accept Him like the children, we are blessed (do not have to worry about anything). A child simply has faith (trust) that their needs will be taken care of and that is the same type of confidence that we need to have. Our need for a Savior was taken care of by Jesus as well as our need for His guidance in our daily lives.