Children at a downtown Toronto, Ont. school have found a gun in the schoolyard as police hunt for a suspect who pulled a gun on a plainclothes officer.

The weapon, which appeared to be a semi-automatic handgun, was found in the schoolyard of Orde Street Junior Public School.

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It could be seen resting on a piece of playground equipment just outside the school building. Students discovered the weapon during the recess break.

At the same time, police were combing a nearby part of downtown known as "hospital row" in relation to an early morning incident.

Police believe the two incidents are connected.

"As a result of information we received at a later point this morning, we've now recovered what we now believe was the weapon in question," Insp. Bruce Johnston said.

Morning search

Const. Norman Smart told CTV.ca the search for the suspect unfolded after plainclothes police officers stopped a car in the King Street and Spadina Avenue area at about 4:40 a.m.

One of two men in the car pulled a gun on the officers, Toronto police spokesperson Const. Isabelle Cotton told CTV.ca on Thursday morning.

"The car took off and went to the area of College and McCaul Streets," Smart said.

The men abandoned the car and fled on foot. One of the officers reportedly fired two shots, but police would not confirm it.

"The officer took some action. He wound up chasing and apprehending an individual. The second individual made good his escape," Johnston said.

One of the suspects was apprehended while the other was seen heading toward the underground parking garage of the children's hospital located at University Avenue and Gerrard Street.

Police launched a search of the parking lot and the area surrounding the hospital just hours before Prime Minister Stephen Harper and Health Minister Tony Clement were scheduled to unveil a plan to reduce waiting times for children's surgeries.

The press conference went ahead as planned.

Unconfirmed reports said that a couple of entrances to the Hospital for Sick Children were locked as a precaution. A parking garage at nearby Women's College Hospital was also sealed off.

The suspect is described as male in his mid-30s, 5'6" tall, weighing about 150 pounds, with brown hair and possible blond highlights.  Police say he may have an eastern European accent.

With a report from CTV's Jim Junkin and files from The Canadian Press