A toddler who was rescued from a horror crime scene in outback Queensland had blood spattered all over her shirt, it has been revealed.

Police pushed back into danger to snatch the child from harm during an hours-long siege on Wednesday evening in Charleville, southwest Queensland.

Two adults were later found dead inside the home and have been named as Michael Waltke, 45, and Julia Brunsdon, 23.

Neighbour Mackenzie-Grace Smith told The Courier Mail she saw the police officer comforting the tiny toddler for up to an hour.

“She had blood literally splattered all over her shirt. It was bloodstained everywhere,” she said.

“The way (the police officer) was holding her was … as you would hold a baby, but he had his arms wrapped around her, with his hand making sure she wasn’t actually facing what was happening.

Police are treating the deaths as a murder-suicide. Photo: Seven News

“He’s standing with himself facing everything, but he’s got her looking away as if trying to protect her.

“She was absolutely quiet. She didn’t look like anything was wrong,” she said.

“It could also be another factor that she was so calm because she was young, she didn’t know what was happening.

Officers had initially been forced to  “tactically withdraw” from the Charleville address in southwest Queensland when they were confronted with what senior police described as “quite a violent crime scene” and the possibility of further weapons inside.

But as they pulled back to safety, the tiny toddler appeared at the front door of the residence.

Southern Region Assistant Commissioner Matthew Vanderbyl said officers then made the split-second decision to go back to rescue the toddler.

“Police actually put themselves back into what I consider to be harm’s way to remove that child from the premises, and that child was taken to hospital and is unharmed,” he said on Thursday.

“It’s quite clear though that that child may well have witnessed what has been a tragic set of events.”

Long-time King Street resident Veronica Hickson told The Courier Mail she was shocked to hear what happened.

“It is a little bit frightening, when it happened nearly across the road from where you’re living,” she said.

“They were a very quiet couple, you’d see them working in their yard.”

The dramatic rescue unfolded in Charleville, about 600km west of Toowoomba, after police and emergency services rushed to reports of a serious assault at a home about 5.30pm on Wednesday.

Vanderbyl said the incident deteriorated rapidly, forcing police to withdraw and specialist negotiators to be called in.

Residents across a three-street block were ordered to stay inside for nearly eight hours as specialist police swarmed the area and declared an emergency situation.

The public safety declaration was revoked shortly before 2am on Thursday.

The deaths are being investigated as a murder-suicide, and police are treating the incident as a death in police operations.

A crime scene has been established and a report will be prepared for the coroner.

Vanderbyl declined to say what weapons were involved and said detectives were still working to confirm the relationship between the man and woman.

He also refused to be drawn on possible domestic and family violence or mental health links.

“It’s probably too early to speculate whether it’s domestic and family violence related at this stage, the circumstances of all the people involved will be thoroughly examined as part of the investigation,” he said.

No one else was injured.

Charleville mayor Shaun Radnedge said the survival of the child was a rare shard of hope in a heartbreaking day for the tight-knit community.

“Our community is devastated by the tragic events that unfolded in Charleville overnight, we are a close-knit town, and an incident of this nature is felt deeply by many people,” he said.

The council is organising support for the community through the days ahead, with the mayor calling on people to reach out to services and each other for help.

“Please do not carry this alone, Charleville is strong because its people look out for one another,” Radnedge said.

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-with AAP