Try and let them settle it themselves, but keep your eyes and ears open. Don't intervene and take sides, because you'll be seen to be favouring one over the other. On the other hand, don't let it get to blows and nasty insults.
When you do intervene, show them that you don't accept physical or verbal violence, you don't take it lightly and you don't accept is as a way of communicating. Tell them they can argue and express their different points of view, but they are not to hurt each other.
It's up to you to determine what level of agressivity you accept, so that they know when they've crossed the line. Even little ones understand this very well!
When things get out of hand... - Fighting, arguing, child psychology, sibling rivalry
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