Police search a townhouse complex in Oshawa, Ont., on Sunday after a man with a knife killed a woman and badly injured her husband and two children. Police later shot and killed a suspect. (Colin Perkel/CP Photo)

A child's birthday party in Oshawa, Ont., ended in horror when a man with a knife killed a mother and wounded her husband and two small children.

Durham Regional Police later shot dead a suspect they had tried to arrest.

Officers were called to a townhouse in the city Saturday afternoon where a woman, her husband and their two sons — ages three and five — had been stabbed. The birthday party was for one of the boys.

Leslie Kelly, 26, was taken to hospital but later died, police said.

Officers went to a neighbouring townhouse to arrest a suspect. Police shot and killed a 47-year-old man, the province's Special Investigations Unit said.

The two boys were taken to Toronto's Hospital for Sick Children, where the older child is in stable condition and the younger one is in critical condition, police said.

The woman's husband Rick Kelly, who was stabbed in the back of the head, is recovering from serious injuries after surgery at Sunnybrook Health Sciences Centre in Toronto.

With files from the Canadian Press