I would suggest that you not permit any visits, supervised or not - not without them earning it.
At this point, your parents have done nothing to undo their unloving attitudes and actions against you and your wife yet your mother turns on the waterworks and expects to be given anything she wants. I do expect that your parents are a package deal so if your mother is provided visitation, your father also benefits.
By you giving-in to her attempt to manipulate you, you are indirectly saying to your parents and to your children that what your parents say negatively about you is correct and their actions are justified.
Your parents each individually made a conscience decision to treat you in the manner they have over the past months. They could have made a decision to not do so if even only for the purpose to maintain a relationship with their grandchildren, but they didn't. They burned bridges. They must be forced to realize that every action has risk and a consequence so the consequence for treating you as they have is not only cutting you off but also loosing their relationship with their grandchildren
Treating you or your wife as they have is totally unacceptable and should not be tolerated. Their behavior sets a bad example for your children and as your responsibility is to safeguard your children's welfare, inappropriate behavior should not be condoned.
Make it clear to your parents how you feel and why you must take this firm stance and let them think on this for a while. If after some time, they show efforts to make amends, only then should you consider permitting them association with your entire family.
Make them earn the privilage to visit with you and your family.