The Middle-Eastern conflict is where the people of the Middle East are being separated because of their religion, and some have more rights than others. The children in the movie have had this going on their whole lives.
The Intifada is a term used for a rebellion, meaning, "shaking off" or "uprising." The Intifada is particularly significant to Faraj, because his friend was shot and killed during a fight.
Checkpoints are a tactic to keep Arabs out of Israeli territory by making Arabs have a liscence to get through to the Israeli land. The kids have (once again) been dealing with this their whole lives.
Prejudice is a big thing in the Middle-Eastern conflict and you can see that some of the kids in the movie have it. For example Moshie said he wanted to kill Arabs, even though he'd never met any. ("Their father killed your father!")
At the end if the movie, most if the children said they wanted peace among Arabs and Jews. And a lot of them that they think the only way to get peace is to know your adversary.