Here's some great advice on sibling conflict from Turansky and Miller of the National Center for Biblical Parenting. Their stuff is always practical and heart-focused...
When children are unhappy they look for ways to draw their parents into a fight. Kids know just where your buttons are and how to push them to make you angry. "Dad wouldn't do it that way," or "You never let me have fun," might be all that's needed to create the volcano effect. When children get angry and are looking for a fight, it's as if they step into the boxing ring and invite you to join them.
All too often parents, believing that they are stronger, smarter, and more powerful, are willing to put on the gloves and enter the ring to "teach this kid a lesson" or "put him in his place." The key indicator that says you want to accept the invitation to fight is your harshness. The intensity increases as each party is determined to win the battle. Unfortunately, setting ourselves up as opponents does more damage to the relationship than we expect.
Instead of getting into the ring with your children, imagine going around the ring to the child's corner and becoming a coach. You might say, "I'm not going to discuss this with you while you're upset. First, you need to settle down and then we'll talk about the problem." Or, "The way you're talking to me sounds like you're trying to provoke me into an argument. I'm not going to fight with you."
Coaching children out of the boxing ring means that we stop dealing with the issue at hand and instead discuss the way we're relating. Moving our focus from the issue to the process has a dramatic effect on the relationship when things begin to get tense. The parent refuses to become a sparring partner and instead looks for ways to improve the relationship. This doesn't mean that the child will instantly become responsive, but it does mean that the parent chooses a different posture, one that offers healing instead of antagonism, and closeness instead of distance.
Barrett here again...I feel like a broken record on this, but I want to remind you that Turansky, Miller, and an entire leadership team of awesomeness will be leading a Parenting Vision and Strategy Conference at Johnson Ferry on March 11 and 12. Go to their site and get registered now. It will be an incredible investment in the generations of people that will follow behind you.