Everyone has to deal with conflict at some point. I have found that when there is conflict it helps to try and put yourself in the other person's shoes and understand their perspective. It is important to ask questions and listen to their point of view. If you know what their interpretation of the situation is, then it is easier to work out a solution. For example.... (give a specific example of a conflict situation and how you dealt with it)."
Emphasize the techniques you use to diffuse conflict such as understanding the other person's position, asking questions to find out the cause of the conflict, not conveying blame and not becoming too emotional. Demonstrate your ability to work collaboratively to reach an acceptable resolution.
Here is another of those standard interview questions that is exploring a number of aspects at once.