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A teenager is fighting for life after being stabbed during a reported neighbourhood dispute west of Brisbane that also saw a house go up in flames.

Police said an altercation between a group of people known to each other took place on Cascade Street in Raceview, Ipswich, this afternoon.

During the assault, a boy in his teens was stabbed, as was a woman in her 50s.

A teenager suffered critical wounds to his abdomen and was taken to the Queensland Children's Hospital, where he is in a life-threatening condition.

A woman in her 50s also suffered stab wounds to her chest and hands, but her condition is less serious. She was taken to Mater Hospital in a stable condition.

The offender, a man, also set fire to a home on the street, which firefighters were able to bring under control.

He was arrested and was assisting police.