Children in the Israeli–Palestinian conflict is extensively reviewed in Wikipedia http://en.wikipedia.org/wiki/Children_in_the_Israeli%E2%80%93Palestinian_conflict.
The neutrality of this article is disputed. (November 2012). A search of 18 databasis give not give any better answers.
Book: Children Of Israel, Children of Palestine: Our Own True Stories (The children of conflict series) Paperback – March 1, 1999 by Laurel Holliday (Author)
A good place to start (at least for the Palestinian side) is "The Effects of Political Violence on Palestinian Children's Behavior Problems: A Risk Accumulation Model" by James Garbarino and Kathleen Kostelny. It is from the mid-1990s but it is an important work on the subject and still relevant.
I did some extensive research centered around not only the psychological implications of the war on Youth but how it has effected their education. There is also a strong correlation between shame in Middle East culture and depression. Hope this helps :)
Article Expanded Research: Learning Disabilities in Palestinian Youth
thank you all for your help, I need to be a bit more specific as I am doing a comparative study of ptsd in children under 16 in war conditions and/or under occupation as compared to those who experience war as a distanced perceived threat, eg US terrorist threat etc