Two people are dead and several others, including two young children, are in hospital with stab wounds after a violent, domestic incident at a birthday party in a Oshawa, Ont., home Saturday.

A woman died at the hand of her ex-spouse, who turned up at the party and went on a stabbing rampage. A 47-year-old man, believed to be wielding a knife, was shot and killed by a Durham police officer who responded to the carnage.

A three-year-old and a seven-year-old have been rushed to Toronto's Sick Kids Hospital. The three-year-old is believed to be in critical condition.

"You just can't imagine the terror those children must have felt," Special Investigations Unit spokesperson John Yoannou told reporters.

The provincial unit is now investigating the incident as it involved a police shooting.

It appears the suspect stabbed the officer, who then responded with gunfire, a woman who lives near the crime scene told CTV Toronto.

Another adult male, the woman's partner, was stabbed several times in the back of his head and is undergoing surgery. He is believed to be in critical condition at Lakeridge hospital.

Durham police responded the incident at about 4:30 in the afternoon, which took place a townhouse on Glen Street.

"There was an altercation between a man armed with a knife and the Durham officer shot and killed that man," Youannou said.

There were three other children at the party when the violent incident took place. They are in the care of a neighbour at a nearby police station.