Abstract We first examined how war-related traumatic events impact on peer and sibling relations, and how the quality of these relations in turn are associated with children’s mental health, indicating a mediation model. Second, we tested the moderating (protective) effects of good peer and sibling relations in attenuating the link between trauma and mental health. The participants were 227 Palestinian boys and girls aged 10—14 years living in the Gaza Strip. They reported\ their exposure to military trauma, evaluated the qualities of peer relationships (loneliness and friendship) and siblingship (warmth, intimacy, conflict and rivalry), and reported symptoms of PTSD, CDI depression and SDQ psychological distress. The results show that exposure to military trauma was associated with intense rivalry in sibling relations and with low friendship quality especially among girls and younger children. The association between military trauma and symptoms was mediated by poor friendship and rivaling sibling relations. Only sibling relations but not peer relations had a moderating effect, as military trauma was not associated with severe symptoms among children who enjoyed considerable intimacy and warmth and lacked rivalry in their siblingships. We discuss theoretical and practical implications of the roles of peer and sibling relations in helping children in traumatic war conditions.