A witness told Channel Nine that, when she heard a commotion, she initially thought it was children mucking around.

"Then I heard him just scream out, 'I've been stabbed, I've been stabbed, help me,' " she said.

"I walked over and there was blood on the floor."

Emergency services found the boy with stab wounds to his upper body. He was taken to Royal Prince Alfred Hospital in a critical condition.

The boy had surgery overnight, and by midday on Friday his condition had improved to stable.

The boy's family told 2GB's Ben Fordham that he was undergoing a number of operations.

They said: "The stomach operation was last night. The knife hit his liver and arteries. The hand doctors have been and the knife went right through his hand. He has cut tendons and broken bones. Hand operation might be today. He's stable for now."

Detective Inspector Gary Coffey said police were "very keen" to speak to the teen once his condition improved.

"It's a pretty ferocious attack, and it’s certainly not something that would normally occur in this area," he said.

Inspector Coffey said police do not believe the teen knew his attacker.

“I can’t be certain about whether anyone else was threatened by the offender ... but what I can say is that no one else has been injured," he said.

Despite an extensive search aided by the dog unit, police have so far been unable to locate a man and a woman they believe could assist with inquiries.

Police described the man as being of Caucasian appearance, aged in his mid to late 20s, 180-185 centimetres tall with ginger hair. He was wearing a red jacket and dark pants.

Police do not yet have a description of the woman. The pair were last seen heading towards Palmer Street.