Sibling rivalry is almost common to parents with more than one child. Not only exclusive to young children, sibling rivalry even extends even to children's adulthood.
For the parents, if you hear the fighting and bickering happening, let each child ask what their problem is, and ask each of them to figure out some ideas which can help solve their problem. Give them a chance to share their own ideas on their own. If ever they can't find solutions on their own, offer some of your own which might work. Everyone must agree with the given solution and stick to itso that there would be change.
If this set up is already being constantly practiced and complied, then it's time the parents should stay out of it. If children come to you to gossip/report about the other, answer them nicely that it's no longer your problem and you believed that they could both generate some solutions to their problems like before.
Even you can obviously tell one child is wrong, try and have that child recognize that for himself; try your best not to take sides with either of them. Sibling rivalry usually happens when the parents do not play fair and seem to pick favorites. Also, taking sides only teaches the child to evade their own problem solving skills when they see that someone older is sticking up for them.
Nevertheless, during those happy times when they play harmoniously together, compliment and praise them for getting along so well. And how about those times when they get to solve problems on their own? Be sure to remind them that you're always proud of them.
Model your behavior as you'd like your kids to emulate you. When you're in a dispute with someone, take note and be careful if your kids are there for they're learning how you deal with the situation.