The accident took place at around 06:00 p.m. [18:00 GMT] on Friday in the Portuguese capital's Lapa district, the Publico news outlet reported, citing witnesses.
Passersby reportedly helped pull the two children out of the tram. The minors are UK citizens.
Over 50 rescuers and firefighters arrived at the scene of the accident. The officers said no passengers had sustained grave wounds, adding those injured had been hospitalized.